-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BncUl97RTpX67g1uQVZv1LxtPYMeNnFNADm3ZodsszQYrpHCGXnz4EbAiMjiH7OH V0BW9jQRaIPShedeTJxDDg== 0000898430-01-502162.txt : 20010829 0000898430-01-502162.hdr.sgml : 20010829 ACCESSION NUMBER: 0000898430-01-502162 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20010828 GROUP MEMBERS: BERKADIA LLC GROUP MEMBERS: BERKADIA MANAGEMENT LLC GROUP MEMBERS: BH COLUMBIA INC GROUP MEMBERS: BH FINANCE LLC GROUP MEMBERS: BHF BERKADIA MEMBER INC GROUP MEMBERS: COLUMBIA INSURANCE COMPANY GROUP MEMBERS: OBH INC GROUP MEMBERS: WARREN E BUFFETT FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BERKSHIRE HATHAWAY INC CENTRAL INDEX KEY: 0001067983 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 470813844 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1440 KIEWIT PLZ CITY: OMAHA STATE: NE ZIP: 68131 BUSINESS PHONE: 4023461400 MAIL ADDRESS: STREET 1: 1440 KIEWIT PLAZA CITY: OMAHA STATE: NE ZIP: 68131 FORMER COMPANY: FORMER CONFORMED NAME: NBH INC DATE OF NAME CHANGE: 19980810 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FINOVA GROUP INC CENTRAL INDEX KEY: 0000883701 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 860695381 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-42383 FILM NUMBER: 1725915 BUSINESS ADDRESS: STREET 1: 4800 N. SCOTTSDALE RD. STREET 2: P O BOX 2209 CITY: SCOTTSDALE STATE: AZ ZIP: 85251-7623 BUSINESS PHONE: 4806364800 MAIL ADDRESS: STREET 1: 4800 N. SCOTTSDALE RD. STREET 2: P O BOX 2209 CITY: SCOTTSDALE STATE: AZ ZIP: 85251-7623 FORMER COMPANY: FORMER CONFORMED NAME: GFC FINANCIAL CORP DATE OF NAME CHANGE: 19930328 SC 13D 1 dsc13d.txt SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) THE FINOVA GROUP INC. ---------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $0.01 PER SHARE ---------------------------------------------------------------------------- (Title of Class of Securities) 317928109 ---------------------------------------------------------------------------- (CUSIP Number) MARC D. HAMBURG BERKSHIRE HATHAWAY INC. 1440 KIEWIT PLAZA OMAHA, NEBRASKA 68131 (402) 346-1400 ---------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) AUGUST 21, 2001 ---------------------------------------------------------------------------- (Date of Event Which Requires Filing of this Statement) If the person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this Schedule because of Rule 13d-1(e), 13d-1(f) or 13d-(g), check the following box / /. Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 18 pages) --------------------------------------------------------------------------- /1/ The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO. 317928109 13D PAGE 2 OF 18 PAGES - ------------------------------------------------------------------------------ 1 S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Berkadia LLC - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 BK (see Item 3) - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(f) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY 61,020,581 (see Item 5 and 6) ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 61,020,581 (see Item 5 and 6) - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 61,020,581 (see Item 5) - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 50.0% (see Item 5) - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 OO - Limited Liability Company - ------------------------------------------------------------------------------ CUSIP NO. 317928109 13D PAGE 3 OF 18 PAGES - ------------------------------------------------------------------------------ 1 S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Berkadia Management LLC - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 N/A - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY 61,020,581 (see Items 5 and 6) ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 61,020,581 (see Items 5 and 6) - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 61,020,581 (see Item 5) - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 50.0% (see Item 5) - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 OO - Limited Liability Company - ------------------------------------------------------------------------------ CUSIP NO. 317928109 13D PAGE 4 OF 18 PAGES - ------------------------------------------------------------------------------ 1 S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON BHF Berkadia Member, Inc. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 N/A - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY 0 ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 61,020,581 (see Items 5 and 6) - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 61,020,581 (see Item 5) - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 50.0% (see Item 5) - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 CO - ------------------------------------------------------------------------------ CUSIP NO. 317928109 13D PAGE 5 OF 18 PAGES - ------------------------------------------------------------------------------ 1 S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON BH Finance LLC - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 N/A - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Nebraska - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY 61,020,581 (see Items 5 and 6) ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 61,020,581 (see Items 5 and 6) - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 61,020,581 (see Item 5) - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 50.0% (see Item 5) - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 OO - Limited Liability Company - ------------------------------------------------------------------------------ CUSIP NO. 317928109 13D PAGE 6 OF 18 PAGES - ------------------------------------------------------------------------------ 1 S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Columbia Insurance Company - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 N/A - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Nebraska - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY 61,020,581 (see Items 5 and 6) ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 61,020,581 (see Items 5 and 6) - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 61,020,581 (see Item 5) - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 50.0% (see Item 5) - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 IC, CO - ------------------------------------------------------------------------------ CUSIP NO. 317928109 13D PAGE 7 OF 18 PAGES - ------------------------------------------------------------------------------ 1 S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON BH Columbia Inc. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 N/A - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Nebraska - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY 61,020,581 (see Items 5 and 6) ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 61,020,581 (see Items 5 and 6) - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 61,020,581 (see Item 5) - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 50.0% (see Item 5) - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 CO - ------------------------------------------------------------------------------ CUSIP NO. 317928109 13D PAGE 8 OF 18 PAGES - ------------------------------------------------------------------------------ 1 S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON OBH, Inc. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 N/A - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY 61,020,581 (see Items 5 and 6) ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 61,020,581 (see Items 5 and 6) - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 61,020,581 (see Item 5) - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 50.0% (see Item 5) - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 CO - ------------------------------------------------------------------------------ CUSIP NO. 317928109 13D PAGE 9 OF 18 PAGES - ------------------------------------------------------------------------------ 1 S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Berkshire Hathaway Inc. - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 N/A - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY 61,020,581 (see Items 5 and 6) ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 61,020,581 (see Items 5 and 6) - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 61,020,581 (see Item 5) - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 50.0% (see Item 5) - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 HC, CO - ------------------------------------------------------------------------------ CUSIP NO. 317928109 13D PAGE 10 OF 18 PAGES - ------------------------------------------------------------------------------ 1 S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Warren E. Buffett - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 N/A - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) or 2(f) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 United States Citizen - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 OWNED BY 61,020,581 (see Item 5 and 6) ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 0 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 61,020,581 (see Items 5 and 6) - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 61,020,581 (see Item 5) - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 50.0% (see Item 5) - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 HC, IN - ------------------------------------------------------------------------------ CUSIP NO. 317928109 13D PAGE 11 OF 18 PAGES This Statement on Schedule 13D is filed in connection with the issuance of 61,020,581 shares ("Shares") of common stock of The FINOVA Group Inc. (the "Company") to Berkadia LLC, a Delaware limited liability company ("Berkadia"), whose members are Berkadia Management LLC, a Delaware limited liability company ("Management"), BHF Berkadia Member Inc., a Delaware corporation ("Member") and an indirect wholly owned subsidiary of Berkshire Hathaway Inc., a Delaware corporation ("Berkshire"), and WMAC Investors, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Leucadia National Corporation, a New York corporation ("Leucadia"). Management's members are BH Finance LLC, a Nebraska limited liability company ("Finance") (and a wholly owned subsidiary of Columbia Insurance Company, a Nebraska corporation ("Columbia")), and WMAC Investment Corporation, a Wisconsin corporation and indirect wholly owned subsidiary of Leucadia ("WMAC"). Columbia is a wholly owned subsidiary of BH Columbia Inc., a Nebraska corporation ("BH Columbia"), which is in turn a wholly owned subsidiary of OBH, Inc., a Delaware corporation ("OBH"). OBH is a wholly owned subsidiary of Berkshire. Berkshire, together with Member, Finance, Columbia, BH Columbia and OBH, are referred to herein as the "Berkshire Entities." Leucadia and its subsidiaries are filing a separate Schedule 13D with respect to these Shares (the "Leucadia 13D") that will include Berkadia and Management as reporting persons. The information in this Schedule 13D and in the Leucadia 13D with respect to Berkadia and Management is duplicative out of necessity, and does not reflect the acquisition of shares of Company common stock other than the Shares. ITEM 1. SECURITY AND ISSUER. The name of the subject company is The FINOVA Group Inc., a Delaware corporation, and the address of its principal executive offices is 4800 N. Scottsdale Road, Scottsdale, Arizona 85251. The class of securities to which this statement relates is the common stock, par value $0.01 per share, of the Company. ITEM 2. IDENTITY AND BACKGROUND. (a)-(c); (f) This Statement is filed by Berkadia, Management, the Berkshire Entities and Warren E. Buffett, who may be deemed to control the Berkshire Entities. The information concerning the name, state or other place of organization, principal business, principal business address and the address of the principal office of each of Berkadia, Management, the Berkshire Entities and Mr. Buffett, and the information concerning the name, business address, present principal occupation or employment, and the name, principal business and address of any corporation or other organization in which such employment or occupation is conducted, and the citizenship of Mr. Buffett and each of the executive officers and directors of Berkadia, Management and the Berkshire Entities is filed as Exhibit 1 hereto. (d); (e) During the last five years, none of Berkadia, Management, the Berkshire Entities or Mr. Buffett, nor, to the best of their knowledge, any of the directors or executive officers of Berkadia, Management or the Berkshire Entities has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which any such person was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The Shares were issued to Berkadia pursuant to the Third Amended and Restated Joint Plan of Reorganization of Debtors Under Chapter 11 of the Bankruptcy Code, as amended and supplemented (the "Plan") filed by the Company and eight of its subsidiaries (collectively, the "Debtors") with the U.S. Bankruptcy Court. The U.S. Bankruptcy Court entered a confirmation order with respect to the Plan on August 10, 2001. Pursuant to the Plan, on August 21, 2001, the effective date of the Plan (the CUSIP NO. 317928109 13D PAGE 12 OF 18 PAGES "Effective Date"), among other things, (i) Berkadia extended a $5,600,000,000 loan to the Company's subsidiary, FINOVA Capital Corporation ("FNV Capital"), on a senior secured basis (the "Berkadia Loan"), (ii) the Company and substantially all of its subsidiaries other than FNV Capital guaranteed FNV Capital's repayment of the Berkadia Loan, (iii) the Company issued the Shares to Berkadia, and (iv) the Company commenced the distributions to creditors of and holders of interests in the Debtors pursuant to the Plan, including the issuance of senior notes (the "New Senior Notes") by the Company. The Third Amended and Restated Disclosure Statement with Respect to Joint Plan of Reorganization of Debtors Under Chapter 11 of the Bankruptcy Code (the "Disclosure Statement"), which includes the text of the Third Amended and Restated Joint Plan of Reorganization dated June 13, 2001, and the Revised Technical Amendments to Third Amended and Restated Joint Plan of Reorganization (the "Revised Plan Amendments") are filed as Exhibit 2A and Exhibit 2B hereto, respectively, and are incorporated herein by reference. Berkadia financed the Berkadia Loan and acquired the Shares with funds drawn under a $5,600,000,000 principal amount loan facility from a group of lenders with Fleet Securities, Inc. as administrative agent (the "Fleet Facility"). The Fleet Facility is secured by a pledge of the $5,600,000,000 secured promissory note from FNV Capital to Berkadia issued pursuant to the Berkadia Loan. Leucadia has guaranteed repayment of the Fleet Facility on a primary basis as to 10% of the Fleet Facility (the "Leucadia Guaranty"), and Berkshire has guaranteed repayment of the Fleet Facility on a primary basis as to 90% of the Fleet Facility, with a secondary guarantee of Leucadia's 10% primary guarantee (the "Berkshire Guaranty"). The Fleet Facility is filed as Exhibit 3 hereto and is incorporated herein by reference. The Leucadia Guaranty and the Berkshire Guaranty are filed as Exhibit 4 and Exhibit 5 hereto, respectively, and are incorporated herein by reference. ITEM 4. PURPOSE OF TRANSACTION. Berkadia's purpose in entering into these transactions was to obtain the opportunity to profit from refinancing the Company. The following description of certain portions of the Plan and the documents implementing the Plan is qualified in its entirety by reference to (i) the Disclosure Statement, (ii) the Plan (including the Revised Plan Amendments), (iii) the New Senior Notes Indenture between the Company and The Bank of New York, as trustee, filed as Exhibit 6 hereto, and (iv) the Credit Agreement between FNV Capital and Berkadia, filed as Exhibit 7 hereto, all of which are incorporated herein by reference. Pursuant to the Plan, on August 21, 2001, Berkadia extended the Berkadia Loan to FNV Capital which, together with the Debtors' cash on hand and the issuance by the Company of the New Senior Notes to holders of claims against or interests in the Debtors, enabled the Debtors to restructure their debt. Because certain of Berkshire's subsidiaries were holders of unsecured claims against FNV Capital, pursuant to the Plan, these subsidiaries have received or will receive, in the aggregate, cash in the amount of approximately $1.07 billion and New Senior Notes in a principal amount of approximately $427 million. Pursuant to the Plan, the Company's Board of Directors was reorganized as of the Effective Date, and Berkadia (through Management, its manager) exercised its right to designate four (4) of the initial directors, which constitutes a majority of the initial reorganized Board of Directors of the Company as of the Effective Date. Under the Berkadia Management LLC Operating Agreement, filed as Exhibit 8 hereto and incorporated herein by reference, Finance nominated two of these four directors and WMAC nominated the other two. Under the Plan, two members of the initial reorganized Board of Directors of the Company are directors who were serving on the Company's Board of Directors prior to the Effective Date and one new director was designated by the Official Committee of Creditors of the Debtors. Pursuant to the Plan, the bylaws of the Company were amended on the Effective Date to provide that so long as at least $500,000,000 in aggregate principal amount of New Senior Notes are outstanding (excluding New Senior Notes held by affiliates of the Company), the holders of New Senior Notes unaffiliated with the Company (the "Unaffiliated Note Holders") shall be allowed to designate the nominee for any replacement or successor to the director CUSIP NO. 317928109 13D PAGE 13 OF 18 PAGES designated by the creditors of the Company pursuant to the terms of the Plan to serve on the Company's Board of Directors (such director and any successor referred to herein as the "Note Holder Designee"). As further described in Item 6, Berkadia, Leucadia, Berkshire and the Company have entered into a Voting Agreement, which is filed as Exhibit 10 hereto and incorporated herein by reference, by which Berkadia is obligated to vote for the election of the Note Holder Designee, as well as for removal of such Note Holder Designee if directed by the Unaffiliated Note Holders. Pursuant to the Plan, under a ten year Management Services Agreement with Leucadia and its subsidiary, Leucadia International Corporation, a Utah corporation, Leucadia will be responsible for the general management of the Company, subject to the authority of the Company's Board of Directors, and has designated its employees to act as Chairman of the Board and President of the Company. Berkshire shares in the fees received by Leucadia under the Management Services Agreement. In connection with the Plan, Finance is commencing a tender offer on August 28, 2001 (the "Tender Offer") for up to $500 million in aggregate principal amount of New Senior Notes at a cash purchase price of 70% of principal amount, or $700 per $1,000 principal amount of New Senior Notes, without accrued interest. The Tender Offer is subject to certain conditions. The Tender Offer will remain open until September 26, 2001, unless extended. Finance will purchase any and all New Senior Notes validly tendered, up to the $500 million aggregate principal amount limit, and will pro rate among tendering holders if the Tender Offer is oversubscribed. Berkshire, together with its direct and indirect subsidiaries, has agreed to retain ownership of all New Senior Notes received by Berkshire pursuant to the Plan or purchased through Finance's Tender Offer for a period of four years from the Effective Date. If Berkshire acquires New Senior Notes in addition to those received by it on the Effective Date or purchased through the Tender Offer, Berkshire may sell or otherwise dispose of any New Senior Notes it owns so long as at all times during the four (4) years after the Effective Date it owns not less than the aggregate principal amount of New Senior Notes that it received on the Effective Date pursuant to the Plan and purchased through the Tender Offer. Following consummation of the Tender Offer, Berkshire may, from time to time, acquire New Senior Notes through open market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise, upon such terms and at such prices as it may determine, which may be more or less than the price paid pursuant to the Tender Offer. Any such purchases would be subject to the restrictions of the Berkadia LLC Operating Agreement and the Berkadia Management LLC Operating Agreement, both of which are described in Item 6, and which descriptions are incorporated herein by reference. Under the terms of the Berkadia Loan, the Company will not be permitted to pay any dividends or repurchase any common stock unless agreed to by Berkadia and otherwise permitted by the terms of the New Senior Notes. For so long as any of the New Senior Notes are outstanding, there will not be any dividends made on, or repurchase of, the Company common stock other than as permitted by the terms of the New Senior Notes. The New Senior Notes provide that: (a) after payment in full of the Berkadia Loan, making payments or funding reserves required prior to making an interest payment on the New Senior Notes (as described above), paying accrued interest on the New Senior Notes and optional purchases of New Senior Notes in permitted amounts, ninety-five percent (95%) of the remaining "available cash" will be used to make semi-annual prepayments of principal on the New Senior Notes and five percent (5%) will be used for distributions to and/or repurchases of stock from the Company's stockholders; and (b) after payment in full of the outstanding principal of the New Senior Notes, optional purchases of New Senior Notes in permitted amounts, and payments to Company common stockholders in an aggregate amount equal to 5.263% of the aggregate principal amount of New Senior Notes issued pursuant to the Plan, ninety-five percent (95%) of any "available cash" will be used to pay contingent interest to holders of New Senior Notes in an aggregate amount of up to $100 million (as such CUSIP NO. 317928109 13D PAGE 14 OF 18 PAGES amount may be reduced to reflect a decrease in the principal amount of New Senior Notes outstanding as a result of repurchases (but not prepayments or repayments) by the Company) and five percent (5%) of such remaining "available cash" will be used for distributions to and/or repurchase of stock from Company stockholders. Contingent interest payments will terminate fifteen (15) years after the Effective Date of the Plan. The reorganized Board of Directors of the Company will adopt procedures in connection with any non-pro rata purchase of Company common stock neither to prefer nor to discriminate against Berkshire and Leucadia in any such purchases. As contemplated by the Plan, on the Effective Date, the Company issued the Shares to Berkadia, representing 50% of the equity of the Company outstanding as of the Effective Date after giving effect to the common stock issued pursuant to the Plan, resulting in a total of 122,041,162 shares of Company common stock being issued and outstanding as of the Effective Date. The Plan calls for additional Company common stock to be issued to satisfy final judgments, if any, for plaintiffs in an existing securities litigation suit against the Company. For all issuances of stock described herein relating to the securities litigation, holders of allowed claims will receive stock having a value, as determined by the Bankruptcy Court, equal to the amount of such claims that was not covered by applicable insurance policies. In the event that any additional Company common stock is issued, Berkadia shall contemporaneously receive additional Company common stock in the amount that it would have received if such issuances had occurred before the Effective Date. Pursuant to the Plan, the Company's post-confirmation business plan does not contemplate any new business activities related to new customers. The Plan provides that while other activities may be initiated or undertaken in the future, the main objective of the Company's post-confirmation business plan is to maximize the value of its portfolio through the orderly liquidation of the portfolio over time. Pursuant to the Plan, the Certificate of Incorporation of the Company was amended on the Effective Date, among other things, to prohibit the Company from issuing non-voting equity securities and to impose certain restrictions on the transfer of the Company's equity securities, applicable to persons who are or become (under applicable tax rules) five-percent shareholders of the Company, without the prior written approval of the Company's Board of Directors. By resolution of the Company's Board of Directors, these transfer restrictions do not apply to any of the Shares owned by Berkadia or its affiliates. Additional information is included in the responses to Items 3 and 6 of this Schedule 13D, which Items are incorporated herein by reference. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) and (b) Berkadia and Management possess the shared power to vote and dispose of the Shares, which constitute 50% of the Company's outstanding common stock. Although Member is a member of Berkadia, Member has no power to vote the Shares because it has delegated such power to Management under the Berkadia LLC Operating Agreement described in Item 6. Member does share power to dispose of the Shares because, except in the event of a liquidation, unanimous approval of the members of Berkadia and Management is required for the Shares to cease to be held by Berkadia. As a member of Management, Finance may be deemed to beneficially own the Shares and to have shared power to vote and dispose of the Shares. Columbia, BH Columbia, OBH and Berkshire, which are in Finance's chain of ownership, also may be deemed to beneficially own the Shares and to have shared power to vote and dispose of the Shares. In addition, as the controlling person of Berkshire, Mr. Buffett may be deemed to beneficially own such Shares and to have shared power to vote and dispose of the Shares. Berkadia, Management and the Berkshire Entities (other than Member) may be deemed to share voting and dispositive powers with respect to the Shares with Leucadia and the CUSIP NO. 317928109 13D PAGE 15 OF 18 PAGES other reporting persons reflected in the Leucadia 13D. Member may be deemed to share dispositive power with respect to the Shares with Leucadia and the other reporting persons reflected in the Leucadia 13D. Other than as described above, none of Berkadia, the Berkshire Entities or Mr. Buffett, nor to their knowledge, any executive officer or director of Berkadia or the Berkshire Entities, is the "beneficial owner" of any shares of the Company's common stock, as such term is defined in Rule 13d-3 under the Exchange Act. (c) None of Berkadia, Management, the Berkshire Entities or Mr. Buffett nor, to their knowledge, any executive officer or director of Berkadia, Management or the Berkshire Entities, has engaged in any transaction in any shares of the Company's common stock during the sixty day period immediately preceding the date hereof. (d) and (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Berkadia has entered into a Registration Rights Agreement with the Company by which the Company has granted Berkadia certain rights to obligate the Company to register for sale under the Securities Act of 1933, as amended, the shares of Company stock issued to Berkadia or its affiliates in connection with the Plan (including the Shares). The Registration Rights Agreement is filed as Exhibit 9 hereto, and is incorporated herein by reference. Berkshire, Leucadia, Berkadia and the Company have entered into a Voting Agreement by which, among other things, Leucadia and Berkshire agree to cause Berkadia to vote for the election of the Note Holder Designee. Also under the Voting Agreement, Leucadia and Berkshire agree to cause Berkadia to vote to remove the Note Holder Designee if the Unaffiliated Note Holders so direct. The obligations of Leucadia and Berkshire under the Voting Agreement are subject to certain termination provisions. The Voting Agreement is filed as Exhibit 10 hereto, and is incorporated herein by reference. The First Amended and Restated Berkadia LLC Operating Agreement (the "Berkadia Agreement") provides that except in the event of a liquidation of the Company or as otherwise unanimously agreed by Berkadia's members, the Company stock shall be transferred and delivered to, held directly by, and not distributed by, Berkadia. Under the Berkadia Agreement, Berkadia further agrees to vote its Company stock in such manner as determined by Management, its manager, and any directors that Berkadia is entitled to, or has the power to, elect or otherwise nominate or designate to the Company's Board of Directors, shall be elected, nominated or designated by Management pursuant to the terms of the Berkadia Management LLC Operating Agreement described below. The Berkadia Agreement further provides that Member is entitled to 20% of proceeds from the Company stock, WMAC Investors, Inc. is entitled to 20% and Management is entitled to 60% (each being that member's "Member Stock Percentage"). Upon a liquidation of Berkadia, the Company stock shall be distributed to the members in-kind in accordance with the Member Stock Percentages. Under the Berkadia Agreement, unless waived by the members, a liquidation will occur if (among other things) the Berkadia Loan and the Fleet Facility are paid in full. The Berkadia Agreement also provides that if a member or its affiliate desires to acquire additional securities or interests in bank loans of the Company or its affiliates, then the member or its affiliate may not proceed with such transaction unless the other member is afforded a reasonable opportunity to acquire one-half of such securities or interests in bank loans on the same terms (excluding New Senior Notes acquired through the Tender Offer). The Berkadia Agreement is filed as Exhibit 11 hereto and is incorporated herein by reference. Under the Berkadia Management LLC Operating Agreement (the "Management Operating Agreement"), filed as Exhibit 8 hereto and incorporated herein by reference, if Berkadia is entitled to, or has power to, elect or otherwise nominate or designate directors to the Company's Board of Directors, then Management shall elect, nominate or designate such directors. If the number of directors to be chosen by Berkadia is an even number, then each of Management's two members shall choose one-half of such CUSIP NO. 317928109 13D PAGE 16 OF 18 PAGES persons. If the number is an odd number, the members shall unanimously agree on one director and one-half of the remaining directors shall be selected by each of Management's two members. The Management Operating Agreement also provides that except in the event of a liquidation of Berkadia, or as otherwise unanimously agreed by Management's members, the shares of Company stock shall be transferred and delivered to, held directly by, and not distributed by, Berkadia. The Management Operating Agreement further provides that Finance is entitled to 50% of proceeds from the Company stock, and WMAC is entitled to 50% (each being that member's "Stock Percentage"). Under the Management Operating Agreement, Management also agrees to vote the shares of Company stock as required by the Voting Agreement and otherwise as is unanimously agreed by Management's members; provided that if the members cannot agree, then Management shall cause Berkadia to vote the shares of Company stock in the manner directed by each member with respect to that number of Berkadia's shares of Company stock as is in proportion to such Member's Stock Percentage. The Management Operating Agreement also provides that if a member or its affiliate desires to acquire additional securities or interests in bank loans of the Company or its affiliates, then the member or its affiliate may not proceed with such transaction unless the other member is afforded a reasonable opportunity to acquire one-half of such securities or interests in bank loans on the same terms (excluding New Senior Notes acquired through the Tender Offer). Berkshire entered into a letter agreement with the Company obligating Berkshire or one of its subsidiaries to commence the Tender Offer after the funding of the Berkadia Loan and the issuance of the New Senior Notes. A copy of the letter agreement is filed as Exhibit 12 hereto, and is incorporated herein by reference. Other than as set forth above or otherwise described in this Schedule 13D, none of Berkadia, Management, the Berkshire Entities or Mr. Buffett nor, to their knowledge, any executive officer or director of Berkadia, Management or the Berkshire Entities, has any other contracts, arrangements, understandings or relationships with any persons with respect to the securities of the Company. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. (1) Executive Officers and Directors of Berkadia, Management and the Berkshire Entities. (2A) The Third Amended and Restated Disclosure Statement with Respect to Joint Plan of Reorganization of Debtors Under Chapter 11 of the Bankruptcy Code, incorporated herein by reference to Exhibit 10.A to the Company's Current Report on Form 8-K filed with the SEC on June 22, 2001. (2B) Revised Technical Amendments to Third Amended and Restated Joint Plan of Reorganization, dated August 10, 2001, incorporated herein by reference to Exhibit 2.B to the Company's Current Report on Form 8-K filed with the SEC on August 27, 2001. (3) Loan Agreement, dated as of August 21, 2001, by and among Berkadia, Fleet Securities, Inc. as administrative agent and various lenders named therein. (4) Leucadia National Corporation Guaranty to Fleet Securities, Inc., as administrative agent, and the lenders from time to time party to the Fleet Facility, dated as of August 21, 2001. (5) Berkshire Hathaway Inc. Guaranty to Fleet Securities, Inc., as administrative agent, and the lenders from time to time party to the Fleet Facility, dated as of August 21, 2001. (6) Indenture, dated as of August 22, 2001, between the Company and The Bank of New York, as trustee, with respect to the Company's 7.5% Senior Secured Notes Maturing 2009 With Contingent Interest Due 2016, including the form of Senior Secured CUSIP NO. 317928109 13D PAGE 17 OF 18 PAGES Note, incorporated herein by reference to Exhibit 10.B to the Company's Current Report on Form 8-K filed with the SEC on August 27, 2001. (7) Credit Agreement, dated as of August 21, 2001, by and between FNV Capital and Berkadia, incorporated herein by reference to Exhibit 10.A to the Company's Current Report on Form 8-K filed with the SEC on August 27, 2001. (8) Berkadia Management LLC Operating Agreement, dated August 21, 2001, by and between Finance and WMAC. (9) Registration Rights Agreement, dated August 21, 2001, by and between Berkadia and the Company, incorporated herein by reference to Exhibit 10.I to the Company's Current Report on Form 8-K filed with the SEC on August 27, 2001. (10) Voting Agreement, dated August 21, 2001, by and among Berkadia, Berkshire, Leucadia and the Company, incorporated herein by reference to Exhibit 10.J to the Company's Current Report on Form 8-K filed with the SEC on August 27, 2001. (11) First Amended and Restated Berkadia LLC Operating Agreement, dated August 21, 2001, by and among Member, WMAC and Management. (12) Letter Agreement between Berkshire and the Company, dated June 13, 2001. (13) Agreement to file the Schedule 13D jointly, as required by Rule 13d- 1(k). CUSIP NO. 317928109 13D PAGE 18 OF 18 PAGES After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement on Schedule 13D is true, complete, and correct. Dated: August 28, 2001 BERKADIA LLC By: /s/ Marc D. Hamburg _________________________ Name: Marc D. Hamburg Title: President BERKADIA MANAGEMENT LLC By: /s/ Marc D. Hamburg _________________________ Name: Marc D. Hamburg Title: President BHF BERKADIA MEMBER, INC. By: /s/ Marc D. Hamburg _________________________ Name: Marc D. Hamburg Title: President BH FINANCE LLC By: /s/ Marc D. Hamburg _________________________ Name: Marc D. Hamburg Title: President COLUMBIA INSURANCE COMPANY By: /s/ Marc D. Hamburg _________________________ Name: Marc D. Hamburg Title: Treasurer BH COLUMBIA INC. By: /s/ Marc D. Hamburg _________________________ Name: Marc D. Hamburg Title: President OBH, Inc. By: /s/ Marc D. Hamburg _________________________ Name: Marc D. Hamburg Title: Vice President BERKSHIRE HATHAWAY INC. By: /s/ Marc D. Hamburg _________________________ Name: Marc D. Hamburg Title: Vice President and Chief Financial Officer WARREN E. BUFFETT /s/ Warren E. Buffett _________________________ EX-1 3 dex1.txt EXECUTIVE OFFICERS & DIRECTORS Exhibit (1) of Schedule 13D The following description sets forth for each of Berkadia, Management and the Berkshire Entities (i) the name, state of organization, principal business, the address of its principal business and the address of its principal office, (ii) the name and title of each executive officer and director or manager of each of Berkadia, Management and the Berkshire Entities, and (iii) each such individual's business address and present principal occupation. Unless otherwise specified, each person listed below is a citizen of the United States and has his or her principal business address at 1440 Kiewit Plaza, Omaha, Nebraska 68131. Unless otherwise specified, the address of the principal business and the address of the principal office of each entity listed below is 1440 Kiewit Plaza, Omaha, Nebraska 68131. A. Berkadia LLC Berkadia LLC, a Delaware limited liability company, was formed to provide a vehicle for Berkshire Hathaway Inc. and Leucadia National Corporation to make a loan to FINOVA Capital Corporation in connection with the restructuring of its debt and to arrange a bank facility to finance such loan. The manager of Berkadia is Berkadia Management LLC. The executive officers of Berkadia LLC are Marc D. Hamburg, President and Chief Financial Officer, Lawrence S. Hershfield, Vice President, Daniel J. Jaksich, Vice President, Thomas E. Mara, Vice President, Mark D. Millard, Vice President, and Joseph A. Orlando, Vice President.
- ----------------------------------------------------------------------------------------------------------------------------------- Name Present Principal Occupation or Employment and Business Address - ---- --------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Marc D. Hamburg Vice President and Treasurer of Berkshire. - ----------------------------------------------------------------------------------------------------------------------------------- Lawrence S. Hershfield President of Leucadia International Corporation, a subsidiary of Leucadia. His business address is 315 Park Avenue South, New York, New York 10010. - ----------------------------------------------------------------------------------------------------------------------------------- Daniel J. Jaksich Controller of Berkshire. - ----------------------------------------------------------------------------------------------------------------------------------- Thomas E. Mara Executive Vice President and Treasurer of Leucadia. His business address is 315 Park Avenue South, New York, New York 10010. - ----------------------------------------------------------------------------------------------------------------------------------- Mark D. Millard Director of Financial Assets of Berkshire. - ----------------------------------------------------------------------------------------------------------------------------------- Joseph A. Orlando Vice President and Chief Financial Officer of Leucadia. His business address is 315 Park Avenue South, New York, New York 10010. - -----------------------------------------------------------------------------------------------------------------------------------
B. Berkadia Management LLC Berkadia Management LLC, a Delaware limited liability company, was created solely to act as manager of Berkadia LLC. Berkadia Management LLC is managed by its members, BH Finance LLC and WMAC Investment Corporation. The executive officers of Berkadia Management LLC are the same as the executive officers of Berkadia LLC. The address for WMAC Investment Corporation is 2 Plaza East, 330 East Kilbourne Avenue, Suite 1280, Milwaukee, Wisconsin 53202. C. BHF Berkadia Member, Inc. BHF Berkadia Management, Inc., a Delaware corporation, was created solely to act as a member of Berkadia LLC. The sole director of BHF Berkadia Member, Inc. is Marc D. Hamburg. The President, Secretary and Treasurer of BHF Berkadia Member, Inc. is Marc D. Hamburg.
- ----------------------------------------------------------------------------------------------------------------------------------- Name Present Principal Occupation or Employment and Business Address - ---- --------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- Marc D. Hamburg Vice President and Treasurer of Berkshire. - -----------------------------------------------------------------------------------------------------------------------------------
D. BH Finance LLC BH Finance LLC, a Nebraska limited liability company, is actively involved in various forms of commercial financing, including various types of commercial loans as well as the investment in pools of mortgages. The member-manager of BH Finance LLC is Columbia Insurance Company. The executive officers of BH Finance LLC are Marc D. Hamburg, President, and Daniel J. Jaksich, Vice President.
- ----------------------------------------------------------------------------------------------------------------------------------- Name Present Principal Occupation or Employment and Business Address - ---- --------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Marc D. Hamburg Vice President and Treasurer of Berkshire. - ----------------------------------------------------------------------------------------------------------------------------------- Daniel J. Jaksich Controller of Berkshire. - -----------------------------------------------------------------------------------------------------------------------------------
E. Columbia Insurance Company Columbia Insurance Company, a Nebraska corporation, is a property and casualty insurance company. The directors of Columbia Insurance Company are Warren E. Buffett, Michael A. Goldberg, Marc D. Hamburg, Forrest N. Krutter and Donald F. Wurster. The executive officers of Columbia Insurance Company are Donald F. Wurster, President, Phillip M. Wolf, Senior Vice President, Marc D. Hamburg, Treasurer, and Forrest N. Krutter, Secretary. The address of Columbia Insurance Company is 3024 Harney Street, Omaha, Nebraska 68131.
- --------------------------------------------------------------------------------------------------------------------------------- Name Present Principal Occupation or Employment and Business Address - ---- --------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- Warren E. Buffett Chairman and Chief Executive Officer of Berkshire. - --------------------------------------------------------------------------------------------------------------------------------- Michael A. Goldberg President of Berkshire Hathaway Credit Corp. - --------------------------------------------------------------------------------------------------------------------------------- Marc D. Hamburg Vice President and Treasurer of Berkshire. - --------------------------------------------------------------------------------------------------------------------------------- Forrest N. Krutter Secretary of Berkshire. - --------------------------------------------------------------------------------------------------------------------------------- Phillip M. Wolf Senior Vice President of Columbia Insurance Company. His business address is 3024 Harney Street, Omaha, Nebraska 68131. - --------------------------------------------------------------------------------------------------------------------------------- Donald F. Wurster President of Columbia Insurance Company. His business address is 3024 Harney Street, Omaha, Nebraska 68131. - ---------------------------------------------------------------------------------------------------------------------------------
F. BH Columbia Inc. BH Columbia Inc., a Nebraska corporation, is a holding company and the parent corporation of Columbia Insurance Company. The directors of BH Columbia Inc. are Marc D. Hamburg, Jerry W. Hufton, Daniel J. Jaksich, Forrest N. Krutter and Mark D. Millard. The executive officers of BH Columbia Inc. are Marc D. Hamburg, President, and Daniel J. Jaksich, Treasurer. The address of BH Columbia Inc. is 4016 Harney Street, Omaha, Nebraska 68131.
- ----------------------------------------------------------------------------------------------------------------------------------- Name Present Principal Occupation or Employment and Business Address - ---- --------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Marc D. Hamburg Vice President and Treasurer of Berkshire. - ----------------------------------------------------------------------------------------------------------------------------------- Jerry W. Hufton Director of Taxes of Berkshire. - -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- Daniel J. Jaksich Controller of Berkshire. - ----------------------------------------------------------------------------------------------------------------------------------- Forrest N. Krutter Secretary of Berkshire. - ----------------------------------------------------------------------------------------------------------------------------------- Mark D. Millard Director of Financial Assets of Berkshire. - -----------------------------------------------------------------------------------------------------------------------------------
G. OBH, Inc. OBH, Inc., a Delaware corporation, is an intermediate holding company which is a direct wholly owned subsidiary of Berkshire Hathaway Inc. The Buffalo News is an operating division of OBH, Inc. The directors of OBH, Inc. are Warren E. Buffett, Marc D. Hamburg and Forrest N. Krutter. The executive officers of OBH, Inc. are Warren E. Buffett, Chairman and Chief Executive Officer, Charles T. Munger, Vice Chairman, and Marc D. Hamburg, Vice President and Treasurer.
- ----------------------------------------------------------------------------------------------------------------------------------- Name Present Principal Occupation or Employment and Business Address - ---- --------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Warren E. Buffett Chairman and Chief Executive Officer of Berkshire. - ----------------------------------------------------------------------------------------------------------------------------------- Marc D. Hamburg Vice President and Treasurer of Berkshire. - ----------------------------------------------------------------------------------------------------------------------------------- Forrest N. Krutter Secretary of Berkshire. - ----------------------------------------------------------------------------------------------------------------------------------- Charles T. Munger Vice Chairman of Berkshire's Board of Directors. His business address is 355 S. Grand Avenue, 34th Floor, Los Angeles, California 90071. - -----------------------------------------------------------------------------------------------------------------------------------
H. Berkshire Hathaway Inc. Berkshire Hathaway Inc., is a Delaware corporation, is a holding company engaged through subsidiaries in a number of diverse businesses, the most important of which is property and casualty insurance and reinsurance offered on both a direct and reinsurance basis through its insurance subsidiaries. The Directors of Berkshire Hathaway Inc. are Warren E. Buffett, Charles T. Munger, Susan T. Buffett, Howard G. Buffett, Malcolm G. Chace, Ronald L. Olson, and Walter Scott, Jr. The executive officers of Berkshire Hathaway Inc. are Warren E. Buffett, Chairman and Chief Executive Officer, Charles T. Munger, Vice Chairman, and Marc D. Hamburg, Vice President and Treasurer.
- ----------------------------------------------------------------------------------------------------------------------------------- Name Present Principal Occupation or Employment and Business Address - ---- --------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Warren E. Buffett Chairman and Chief Executive Officer of Berkshire. - ----------------------------------------------------------------------------------------------------------------------------------- Charles T. Munger Vice Chairman of Berkshire's Board of Directors. His business address is 355 S. Grand Avenue, 34th Floor, Los Angeles, California 90071. - ----------------------------------------------------------------------------------------------------------------------------------- Howard G. Buffett Chairman of the Board of Directors of The GSI Group. His business address is 1004 East Illinois Street, Assumption, Illinois 62510. - ----------------------------------------------------------------------------------------------------------------------------------- Susan T. Buffett A Director of Berkshire since 1991. She is not otherwise employed. - ----------------------------------------------------------------------------------------------------------------------------------- Malcolm G. Chace Chairman of the Board of Directors of BankRI. His business address is One Providence Washington Plaza, Providence, Rhode Island 02903. - ----------------------------------------------------------------------------------------------------------------------------------- Marc D. Hamburg Vice President and Treasurer of Berkshire. - -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Ronald L. Olson A partner in the law firm of Munger, Tolles & Olson LLP. His business address is 355 S. Grand Avenue, 35th Floor, Los Angeles, California 90071. - ----------------------------------------------------------------------------------------------------------------------------------- Walter Scott, Jr. Chairman of the Board of Level 3 Communications, Inc. His business address is 3555 Farnam Street, Omaha, Nebraska 68131. - -----------------------------------------------------------------------------------------------------------------------------------
EX-3 4 dex3.txt LOAN AGREEMENT DATED AUGUST 21, 2001 Exhibit 3 LOAN AGREEMENT -------------- Dated as of August 21, 2001 among BERKADIA LLC THE LENDERS LISTED ON SCHEDULE 1 HERETO and FLEET SECURITIES, INC., as Administrative Agent and Lead Arranger TABLE OF CONTENTS ----------------- 1. DEFINITIONS AND RULES OF INTERPRETATION............................................ 1 1.1. Definitions............................................................ 1 1.2. Rules of Interpretation................................................ 12 2. THE LOAN........................................................................... 14 2.1. Funding................................................................ 14 2.2. Facility Fee........................................................... 14 2.3. The Notes.............................................................. 14 2.4. Repayment of Loan...................................................... 14 2.4.1. Payment at Maturity.......................................... 14 2.4.2. Mandatory Prepayments........................................ 14 2.4.3. Asset Coverage............................................... 15 2.5. Optional Prepayment of Loan............................................ 15 2.6. Optional Cancellation of Loan.......................................... 15 2.7. Interest on Loan....................................................... 15 2.7.1. Interest Rates.............................................. 15 2.7.2. Interest Payments........................................... 16 2.8. Interest Options....................................................... 16 2.8.1. CP Rate Loans............................................... 16 2.8.2. LIBOR Rate Loans............................................ 17 3. CERTAIN GENERAL PROVISIONS......................................................... 17 3.1. Closing Fee............................................................ 17 3.2. Administrative Agent's Fee............................................. 17 3.3. Funds for Payments..................................................... 17 3.3.1. Payments to Administrative Agent............................ 17 3.3.2. No Offset, etc.............................................. 17 3.3.3. Non-U.S. Lenders............................................ 18 3.4. Computations........................................................... 19 3.5. Inability to Determine LIBOR Rate...................................... 19 3.6. Illegality............................................................. 20 3.7. Additional Costs, etc.................................................. 20 3.8. Capital Adequacy....................................................... 21 3.9. Certificate............................................................ 22 3.10. Indemnity.............................................................. 22 3.11. Interest After Default................................................. 22 3.12. Replacement of Lenders................................................. 22 3.13. Conduit Lenders........................................................ 23 4. REPRESENTATIONS AND WARRANTIES..................................................... 24 4.1. Corporate Authority.................................................... 24 4.1.1. Incorporation; Good Standing................................ 24 4.1.2. Authorization............................................... 24 4.1.3. Enforceability.............................................. 24
-ii- 4.2. Governmental Approvals................................................. 24 4.3. Title to Properties; Leases............................................ 25 4.4. Financial Statements................................................... 25 4.4.1. Fiscal Year................................................. 25 4.4.2. Financial Statements........................................ 25 4.5. No Material Adverse Changes, etc....................................... 25 4.6. Franchises, Patents, Copyrights, etc................................... 25 4.7. Litigation............................................................. 25 4.8. No Materially Adverse Contracts, etc................................... 25 4.9. Compliance with Other Instruments, Laws, etc........................... 25 4.10. Tax Status............................................................. 26 4.11. No Event of Default.................................................... 26 4.12. Holding Company and Investment Company Acts............................ 26 4.13. Absence of Financing Statements, etc................................... 26 4.14. Employee Benefit Plans................................................. 26 4.15. Use of Proceeds........................................................ 26 4.15.1. General..................................................... 26 4.15.2. Regulations U and X......................................... 26 4.16. Environmental Compliance............................................... 26 4.17. Subsidiaries, etc...................................................... 26 4.18. Reorganization Plan.................................................... 26 4.19. Disclosure............................................................. 27 5. AFFIRMATIVE COVENANTS.............................................................. 27 5.1. Punctual Payment....................................................... 27 5.2. Maintenance of Office.................................................. 27 5.3. Records and Accounts................................................... 27 5.4. Financial Statements, Certificates and Information..................... 27 5.5. Notices of Default..................................................... 29 5.6. Legal Existence; Maintenance of Properties............................. 29 5.7. Taxes.................................................................. 30 5.8. Inspection of Properties and Books, etc................................ 30 5.9. Compliance with Laws, Contracts, Licenses, and Permits................. 30 5.10. Use of Proceeds........................................................ 30 5.11. FINOVA Loan Documents.................................................. 33 5.12. Further Assurances..................................................... 30 6. CERTAIN NEGATIVE COVENANTS......................................................... 31 6.1. Restrictions on Indebtedness........................................... 31 6.2. Restrictions on Liens.................................................. 31 6.3. Restrictions on Investments............................................ 32 6.4. Merger and Consolidation............................................... 33 6.5. Sale and Leaseback..................................................... 33 6.6. Employee Benefit Plans................................................. 33 6.7. Business Activities.................................................... 33 6.8. Fiscal Year............................................................ 33 6.9. Absence of Financing Statements, etc................................... 33 7. CLOSING CONDITIONS................................................................. 34
-iii- 7.1. Loan Documents; FINOVA Loan Documents.................................. 34 7.2. Certified Copies of Governing Documents................................ 34 7.3. Corporate or Other Action.............................................. 34 7.4. Incumbency Certificate................................................. 34 7.5. UCC Search Results..................................................... 34 7.6. Opinion of Counsel..................................................... 34 7.7. Payment of Fees........................................................ 34 7.8. No Material Adverse Change............................................. 35 7.9. Liquidity Provider Agreements.......................................... 35 7.10. Final Order............................................................ 35 7.11. Representations True; No Event of Default.............................. 35 7.12. No Legal Impediment.................................................... 35 7.13. Proceedings and Documents.............................................. 35 8. EVENTS OF DEFAULT; ACCELERATION; ETC............................................... 35 8.1. Events of Default and Acceleration..................................... 35 8.2. Remedies............................................................... 38 8.3. Distribution of Collateral Proceeds.................................... 38 9. THE ADMINISTRATIVE AGENT........................................................... 39 9.1. Authorization.......................................................... 39 9.2. Employees and Agents................................................... 39 9.3. No Liability........................................................... 39 9.4. No Representations..................................................... 40 9.4.1. General..................................................... 40 9.4.2. Closing Documentation, etc.................................. 40 9.5. Payments............................................................... 40 9.5.1. Payments to Administrative Agent............................ 40 9.5.2. Distribution by Administrative Agent........................ 41 9.5.3. Delinquent Lenders.......................................... 41 9.6. Holders of Notes....................................................... 41 9.7. Indemnity.............................................................. 42 9.8. Administrative Agent as Lender......................................... 42 9.9. Resignation............................................................ 42 9.10. Notification of Defaults and Events of Default......................... 42 10. ASSIGNMENT AND PARTICIPATION....................................................... 42 10.1. Conditions to Assignment by Lenders.................................... 42 10.2. Certain Representations and Warranties; Limitations; Covenants......... 43 10.3. Register............................................................... 44 10.4. New Notes.............................................................. 44 10.5. Participations......................................................... 45 10.6. Assignee or Participant Affiliated with the Borrower................... 45 10.7. Miscellaneous Assignment Provisions.................................... 45 10.8. Assignment by Borrower................................................. 46 11. PROVISIONS OF GENERAL APPLICATIONS................................................. 46 11.1. Setoff................................................................. 46 11.2. Expenses............................................................... 47
-iv- 11.3. Indemnification........................................................ 48 11.4. Treatment of Certain Confidential Information.......................... 48 11.4.1. Confidentiality............................................. 48 11.4.2. Prior Notification.......................................... 49 11.4.3. Other....................................................... 49 11.5. Survival of Covenants, Etc............................................. 49 11.6. Notices................................................................ 49 11.7. Governing Law.......................................................... 50 11.8. Headings............................................................... 50 11.9. Counterparts........................................................... 50 11.10. Entire Agreement, Etc.................................................. 51 11.11. Waiver of Jury Trial................................................... 51 11.12. Consents, Amendments, Waivers, Etc..................................... 51 11.13. Severability........................................................... 52
-v- Exhibits -------- Exhibit A Form of Note - --------- Exhibit B Form of Assignment and Acceptance - --------- Exhibit C-1 Form of BH Guaranty - ----------- Exhibit C-2 Form of LNC Guaranty - ----------- Exhibit D Form of Pledge Agreement - --------- Exhibit E Form of Asset Coverage Certificate - --------- Exhibit F Form of Interest Payment Certificate - --------- Schedules --------- Schedule 1 Lenders and Commitments - ---------- LOAN AGREEMENT -------------- This LOAN AGREEMENT is made as of August 21, 2001, by and among BERKADIA LLC (the "Borrower"), a Delaware limited liability company having its principal -------- place of business at 1440 Kiewit Plaza, Omaha, Nebraska 68131, the lending institutions listed on Schedule 1 and FLEET SECURITIES, INC., as administrative -------- - agent for such lending institutions. 1. DEFINITIONS AND RULES OF INTERPRETATION. --------------------------------------- 1.1. Definitions. The following terms shall have the meanings set forth in ----------- this (S)1 or elsewhere in the provisions of this Loan Agreement referred to below: Administrative Agent. Fleet Securities, Inc., acting as agent for the -------------------- Lenders, and each other Person appointed as the successor Administrative Agent in accordance with (S)9.9. Administrative Agent's Fee. See (S)3.2. -------------------------- Administrative Agent's Fee Letter. The administrative agent's fee letter --------------------------------- dated as of the date hereof between the Borrower and the Administrative Agent. Administrative Agent's Office. The Administrative Agent's office located ----------------------------- at 100 Federal Street, Boston, Massachusetts 02110, or at such other location as the Administrative Agent may designate by notice to the Borrower and the Lenders from time to time. Administrative Agent's Special Counsel. Bingham Dana LLP or such other -------------------------------------- counsel as may be approved by the Administrative Agent. Affiliate. Any Person which, directly or indirectly, controls, is --------- controlled by or is under common control with the Borrower. "Control" of the Borrower means the power, directly or indirectly, (a) to vote ten percent (10%) or more of the Capital Stock (on a fully diluted basis) of the Borrower having ordinary voting power for the election of directors, managing members or general partners (as applicable); or (b) to direct or cause the direction of the management and policies of the Borrower (whether by contract or otherwise). Aggregate Interest Amount. With respect to each Interest Period, the sum ------------------------- of the Interest Amount for all Conduit Lenders for such Interest Period. Applicable Margin. At any date, the percentage amount per annum determined ----------------- by reference to the Pricing Grid, based on the Pricing Level on such date. Notwithstanding the foregoing, in the event that any CP Rate Loan is converted to a LIBOR Rate Loan solely as a result of the occurrence of a CP Disruption Event, the Applicable Margin shall be equal to .625%; provided, -------- however, that if there is a draw on a Liquidity Commitment as a result of a - ------- downgrade of any Liquidity Provider below "P-1" (as rated by Moody's) or "A-1" (as rated by Standard & Poor's) or if the CP issued by any Conduit Lender is downgraded below "P-1" (as rated by Moody's) or "A-1" (as rated by Standard & Poor's) then the Applicable Margin shall be determined by reference to the Pricing Grid. -2- Asset Value. As of the date of determination, the book value, net of ----------- reserves, of all of the assets of FINOVA Group and its Subsidiaries in accordance with GAAP (without regard to "fresh start" accounting provisions) which assets are either pledged to, or for the benefit of, the Borrower or are not otherwise encumbered (but only to the extent of such other encumbrances). Assignment and Acceptance. See (S)10.1. ------------------------- Balance Sheet Date. December 31, 2000. ------------------ Base Rate. The higher of (a) the variable annual rate of interest so --------- designated from time to time by Fleet National Bank as its "prime rate", such rate being a reference rate and not necessarily representing the lowest or best rate being charged to any customer, and (b) one-half of one percent (1/2%) above the Federal Funds Effective Rate. For the purposes of this definition, "Federal ------- Funds Effective Rate" shall mean for any day, the rate per annum equal to the - ----- --------- ---- weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three funds brokers of recognized standing selected by the Administrative Agent. Changes in the Base Rate resulting from any changes in Fleet National Bank's "prime rate" shall take place immediately without notice ---------- or demand of any kind. Base Rate Loans. All or any portion of the Loan bearing interest --------------- calculated by reference to the Base Rate. Berkadia Note. The promissory note issued to the Borrower evidencing the ------------- obligations of FNV Capital to the Borrower under the FINOVA Credit Agreement. BH. Berkshire Hathaway Inc., a Delaware corporation. -- BH Guaranty. The Guaranty, dated as of the Closing Date, made by BH in ----------- favor of the Lenders and the Administrative Agent in the form attached hereto as Exhibit C-1. - ------- --- Borrower. As defined in the preamble hereto. -------- Business Day. Any day on which (a) commercial banks are open for ------------ international business (including dealings in Dollar deposits) in London or such other eurodollar interbank market as may be selected by the Administrative Agent in its sole discretion acting in good faith, and (b) banking institutions in New York, New York and Boston, Massachusetts are open for the transaction of banking business. Capital Stock. Any and all shares, interests, participations or other ------------- equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing. -3- Chapter 11 Cases. The cases of FINOVA Group, FNV Capital and certain of ---------------- their respective Subsidiaries under Chapter 11 of the Bankruptcy Code, as currently being administered by the Bankruptcy Court under case numbers 01-0697 (PJW) through 01-0705 (PJW). Closing Date. The first date on which the conditions set forth in (S)7 ------------ have been satisfied and the Loan is made. Code. The Internal Revenue Code of 1986. ---- Collateral. All of the property, rights and interests of the Borrower that ---------- are or are intended to be subject to the security interest created by the Pledge Agreement. Commercial Paper or CP. With respect to each Lender that is a Conduit ---------------- -- Lender, the promissory notes issued by, or for the benefit of, such Lender in the United States commercial paper market. Commitment. With respect to each Lender, the amount set forth in the ---------- column labeled "Commitment" opposite such Lender's name on Schedule 1 hereto, as -------- - the same may be reduced from time to time in accordance with the terms hereof. Commitment Percentage. With respect to each Lender, the percentage amount --------------------- set forth on Schedule 1 opposite such Lender's name. ---------- Conduit Counsel. Sidley Austin Brown & Wood or such other counsel as may --------------- be approved as Conduit Counsel by the Administrative Agent. Conduit Lender. A Lender which is a special purpose finance vehicle that -------------- issues Commercial Paper. Consolidated or consolidated. With reference to any term defined herein, ---------------------------- shall mean that term as applied to the accounts of any Person and its Subsidiaries, consolidated in accordance with GAAP. Controlling Party. So long as no event of default under the BH Guaranty ----------------- has occurred and is continuing, the Borrower, and during the continuance of any such event of default, the Required Lenders. Conversion Notice. A written notice made by any Lender to the ----------------- Administrative Agent of a conversion of CP Rate Loans to LIBOR Rate Loans or LIBOR Rate Loans to CP Rate Loans. CP Disruption Event. With respect to any Conduit Lender, a CP Disruption ------------------- Event shall occur at any time that such Conduit Lender (a) is precluded or prohibited from raising funds through the issuance of Commercial Paper in the United States commercial paper market, or (b) is, in its reasonable judgment, unable to issue such Commercial Paper due to conditions prevailing in such market. -4- CP Rate. With respect to any Conduit Lender, for any Interest Period with ------- respect to a CP Rate Loan funded by such Conduit Lender, the per annum rate notified by such Conduit Lender to the Administrative Agent as its "CP Rate", for such CP Rate Loan, which rate shall (a) reflect the actual cost of funds to such Conduit Lender of making and maintaining such CP Rate Loan for the applicable Interest Period, including fees payable by or on behalf of such Conduit Lender to any dealer or placement agent in respect of Commercial Paper issued to fund such CP Rate Loan, (b) be calculated in the manner in which such Conduit Lender typically calculates its costs of funds in similar transactions, and (c) include an increment to such rate of one (1) basis point to cover administrative costs of such Conduit Lender; provided, however, if such rate ----------------- with regard to any Interest Period for the applicable CP Rate Loan is a discount rate (or rates), the "CP Rate" shall be the rate resulting from converting such discount rate (or rates) to an interest-bearing equivalent rate per annum. CP Rate Loan. All or any portion of the Loan bearing interest calculated ------------ by reference to the CP Rate. Debt Rating. The rating issued from time to time (whether on a preliminary ----------- basis or otherwise) by Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc. ("Standard & Poor's") or Moody's Investors Service, -------- - ------ Inc. ("Moody's") or such other rating service or services as BH may designate ------- from time to time with the consent of the Required Lenders (each a "Successor --------- Rating Agency") with respect to unsecured and non-credit enhanced debt of BH not - ------ ------ maturing within twelve months and not subordinated by its terms in right of payment to other unsecured debt of BH (such debt, "Long Term Senior Debt"); ---- ---- ------ ---- provided that, (i) In the event of a one step split Debt Rating by the two rating agencies, the higher rating shall constitute the Debt Rating hereunder, provided further that, in the event that the Debt Rating is split by two or -------- more steps by the two rating agencies, the step rating which is one above the lowest step rating shall constitute the Debt Rating hereunder; (ii) In the event that different types or series of Long Term Senior Debt have different Debt Ratings from one or more rating agencies, the Long Term Senior Debt with the highest Debt Ratings will constitute such rating agency's Debt Rating for purposes of clause (i) hereunder; and (iii) In the event that Standard & Poor's or Moody's changes its debt rating designations, definitions or symbols or in the event a Successor Rating Agency is used, the Borrower, the Administrative Agent and the Required Lenders shall agree as to the exact application of such new debt rating terminology in this Loan Agreement, taking into account the explanation of such new rating terminology by Standard & Poor's, Moody's or such Successor Rating Agency as the case may be, and its comparability to the Debt Ratings set forth in Section 8.1(e) hereof. Defaults. See (S)8.1. -------- Delinquent Lender. See (S)9.5.3. ----------------- Dollars or $. Dollars in lawful currency of the United States of America. ------- - -5- Domestic Lending Office. Initially, the office of each Lender designated ----------------------- as such in Schedule 1 hereto; thereafter, such other office of such Lender, if -------- - any, located within the United States that will be making or maintaining Base Rate Loans or CP Rate Loans. Drawdown Date. The date on which the Loan is made. ------------- Employee Benefit Plan. Any employee benefit plan within the meaning of --------------------- (S)3(3) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan. Environmental Laws. Any judgment, decree, order, law, permit, license, ------------------ rule or regulation pertaining to environmental matters, or any federal, state, or local statute, regulation, ordinance, order or decree relating to public health, waste transportation or disposal, or the environment. ERISA. The Employee Retirement Income Security Act of 1974. ----- ERISA Affiliate. Any Person which is treated as a single employer with the --------------- Borrower under (S)414 of the Code; provided, however, that for purposes of the -------- ------- Loan Documents, the definition of ERISA Affiliate shall not include BH, LNC, or any of their respective affiliates (other than the Borrower). Eurocurrency Reserve Rate. For any day with respect to a LIBOR Rate Loan, ------------------------- the maximum rate (expressed as a decimal) at which any bank subject thereto would be required to maintain reserves under Regulation D of the Board of Governors of the Federal Reserve System (or any successor or similar regulations relating to such reserve requirements) against "Eurocurrency Liabilities" (as ------------ ----------- that term is used in Regulation D), if such liabilities were outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on and as of the effective date of any change in the Eurocurrency Reserve Rate. Events of Default. See (S)8.1. ----------------- Facility Fee. See (S)2.2. ------------ Fees. Collectively, the Facility Fee, the Administrative Agent's Fees, and ---- the Structuring Fee. Final Order. An order or judgment entered by the Bankruptcy Court, ----------- granting approval and confirmation of the Reorganization Plan with respect to each of FINOVA Group, FNV Capital and their respective Subsidiaries that are debtors in the Chapter 11 Cases, as entered on the docket in any Chapter 11 Case (a) which has not been reversed, stayed, modified or amended, and as to which the time to appeal, seek certiorari or move for reargument or rehearing has expired, and no appeal, petition for certiorari or motion for reargument or rehearing has been timely taken or (b) as to which any appeal has been taken or any petition for certiorari or motion for reargument or rehearing has been filed, and such appeal, petition or motion has been conclusively withdrawn or resolved by the highest court to which the order or judgment was appealed or from which certiorari, reargument or rehearing was sought. -6- Financial Affiliate. A Subsidiary of the bank holding company controlling ------------------- any Lender, which Subsidiary is engaging in any of the activities permitted by (S)4(e) of the Bank Holding Company Act of 1956 (12 U.S.C. (S)1843). FINOVA Credit Agreement. The credit agreement dated on or prior to the ----------------------- Closing Date between the Borrower and FNV Capital pursuant to which the Borrower agrees to lend FNV Capital $5,600,000,000 on the terms and conditions contained therein, in the form delivered to the Administrative Agent, as such agreement may be amended, modified or supplemented or the provisions thereof waived, from time to time. FINOVA Group. The FINOVA Group Inc., a Delaware corporation. ------------ FINOVA Loan. The loan to be made by the Borrower to FNV Capital in ----------- accordance with the provisions of the FINOVA Credit Agreement. FINOVA Loan Documents. The FINOVA Credit Agreement, the Berkadia Note and --------------------- all guaranties, security agreements, pledge agreements, and mortgages securing the same. FNV Capital. FINOVA Capital Corporation, a Delaware corporation. ----------- GAAP or generally accepted accounting principles. Principles that are (a) ---- ---------------------------------------- consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time, and (b) consistently applied with past financial statements of the Borrower adopting the same principles. Governing Documents. With respect to any Person that (a) is a corporation, ------------------- its certificate or articles of incorporation, its by-laws and all shareholder agreements, voting trusts and similar arrangements applicable to any of its Capital Stock, (b) that is a limited liability company, its operating agreement, certificate of formation, limited liability company agreement and all other agreements and similar arrangements applicable to any of its membership interests, and (c) is a limited partnership, its certificate of limited partnership, its limited partnership agreement, and all other agreements and similar arrangements applicable to its partnership interests. Governmental Authority. Any foreign, federal, state, regional, local, ---------------------- municipal or other government, or any department, commission, board, bureau, agency, public authority or instrumentality thereof, or any court or arbitrator. Guaranteed Pension Plan. Any employee pension benefit plan within the ----------------------- meaning of (S)3(2) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan. Guaranties. Collectively, the BH Guaranty and the LNC Guaranty. ---------- Guarantors. Collectively, BH and LNC. ---------- -7- Hazardous Substances. Any toxic substances, hazardous waste or other -------------------- material regulated by any Environmental Law. Hedging Agreements. All interest rate swap agreements, interest rate cap ------------------ agreements, interest rate collar agreements, other interest rate hedging agreements or other similar agreements and foreign exchange contracts, currency swap agreements, commodity hedging agreements and other similar agreements designed to protect against the fluctuation in interest rates, currency or commodity values to which the Borrower is a party. Indebtedness. As to any Person and whether recourse is secured by or is ------------ otherwise available against all or only a portion of the assets of such Person and whether or not contingent, but without duplication: (a) every obligation of such Person for money borrowed by such Person, (b) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments issued by such Person, including obligations incurred in connection with the acquisition of property, assets or businesses, (c) every reimbursement obligation of such Person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such Person, (d) every obligation of such Person issued or assumed as the deferred purchase price of property or services (including securities repurchase agreements but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business which are not overdue or which are being contested in good faith), (e) every obligation of such Person under any capitalized lease, (f) every obligation, contingent or otherwise, of such Person guaranteeing, or having the economic effect of guaranteeing or otherwise acting as surety for, any obligation of a type described in any of clauses (a) through (e) (the "primary obligation") of another Person (the "primary ------- ---------- ------- obligor"), in any manner, whether directly or indirectly, and including, ------- without limitation, any obligation of such Person (i) to purchase or pay (or advance or supply funds for the purchase of) any security for the payment of such primary obligation, (ii) to purchase property, securities or services for the purpose of assuring the payment of such primary obligation, or (iii) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such primary obligation, and (g) obligations under Hedging Agreements. The "amount" or "principal amount" of any Indebtedness at any time of ------ --------- ------ determination represented by (w) any Hedging Agreement shall be the maximum amount of any termination or loss payment required to be paid by such Person if such Hedging Agreement were, at the time of determination, to be terminated by reason of any event of default or early termination event thereunder, whether or not such event of default or early termination event has in fact occurred, (x) any Indebtedness, issued at a price that is less than the principal amount at -8- maturity thereof, shall be the amount of the liability in respect thereof determined in accordance with GAAP, (y) any capitalized lease shall be the principal component of the aggregate of the rentals obligation under such capitalized lease payable over the term thereof that is not subject to termination by the lessee, and (z) any guaranty or other contingent liability referred to in clause (f) shall be an amount equal to the stated or determinable amount of the primary obligation in respect of which such guaranty or other contingent obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. Interest Amount. With respect to each Conduit Lender for each Interest --------------- Period, the sum of the interest accrued at the applicable CP Rate plus the Applicable Margin on the portion of the outstanding Loan funded by such Conduit Lender by the issuance of Commercial Paper for each day during such Interest Period. Interest Payment Date. As to each Base Rate Loan, LIBOR Rate Loan and CP --------------------- Rate Loan, the seventh day of each calendar month. Interest Period. With respect to all or any applicable portion of the --------------- Loan, (a) initially, the period commencing on the Drawdown Date and ending on the seventh day of the succeeding calendar month, and (b) thereafter, each period commencing on the last day of the preceding Interest Period applicable to all or such portion of the Loan and ending on the seventh day of each succeeding calendar month; provided that all of the foregoing provisions relating to -------- Interest Periods are subject to the following: (A) if any Interest Period would end on a day that is not a Business Day, that Interest Period shall end on the next succeeding Business Day; and (B) any Interest Period that would otherwise extend beyond the Maturity Date shall end on the Maturity Date. Investments. All expenditures made and all liabilities incurred ----------- (contingently or otherwise) for the acquisition of stock, other equity interests or Indebtedness of, or for loans, advances, capital contributions or transfers of property for a similar purpose to, or in respect of any guaranties of (or other commitments as described under Indebtedness), or obligations of, any Person. In determining the aggregate amount of Investments outstanding at any particular time: (a) the amount of any Investment represented by a guaranty shall be taken as not less than the principal amount of the obligations guaranteed and still outstanding, except that if such guaranty is limited in amount, the amount of such Investment shall be equal to the amount to which such guaranty is limited; (b) there shall be deducted in respect of each such Investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, dividend or distribution); (c) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise; and (d) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof. Lead Arranger. Fleet Securities, Inc. ------------- -9- Lender Affiliate. (a) With respect to any Lender, (i) an Affiliate of such ---------------- Lender or (ii) any entity (whether a corporation, partnership, limited liability company, trust or legal entity) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by such Lender or an Affiliate of such Lender and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other entity (whether a corporation, partnership, limited liability company, trust or other legal entity) that is a fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an affiliate of such investment advisor. Lenders. Each of the lending institutions (including Conduit Lenders) ------- listed on Schedule 1 hereto and any other Person who becomes an assignee of any -------- - rights and obligations of a Lender pursuant to (S)10. LIBOR Lending Office. Initially, the office of each Lender designated as -------------------- such in Schedule 1 hereto; thereafter, such other office of such Lender, if any, -------- - that shall be making or maintaining LIBOR Rate Loans. LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan, the ---------- rate of interest equal to (a) the rate determined by the Administrative Agent at which Dollar deposits for such Interest Period are offered based on information presented on Telerate Page 3750 as of 11:00 a.m. London time on the second Business Day prior to the first day of such Interest Period, divided by (b) a number equal to 1.00 minus the Eurocurrency Reserve Rate. ----- LIBOR Rate Loans. All or any portion of the Loan bearing interest ---------------- calculated by reference to the LIBOR Rate. Lien. Any mortgage, deed of trust, security interest, pledge, ---- hypothecation, assignment, attachment, deposit arrangement, encumbrance, lien (statutory, judgment or otherwise), or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any capitalized lease, any synthetic lease, any financing lease involving substantially the same economic effect as any of the foregoing and the filing of any financing statement under the UCC or comparable law of any jurisdiction). Liquidity Commitment. The agreement by any Liquidity Provider pursuant to -------------------- the terms of a Liquidity Provider Agreement to provide a 364-day backstop liquidity commitment in an amount at least equal to 102% (or such other amount as is provided in such Liquidity Provider's constituent and operating agreements) of the portion of the outstanding Loan provided by any Conduit Lender. Liquidity Provider. The financial institution(s) having a rating no lower ------------------ than "P-1" if rated by Moody's, and no lower than "A-1" if rated by Standard & Poor's which provide liquidity support to a Conduit Lender and/or a commitment to become a Lender under the Loan Agreement pursuant to an assignment by a Conduit Lender, in each case pursuant to a Liquidity Provider Agreement. -10- Liquidity Provider Agreement. An agreement between a Conduit Lender and ---------------------------- one or more Liquidity Providers relating to such Liquidity Provider's Liquidity Commitment. LNC. Leucadia National Corporation, a New York corporation. --- LNC Guaranty. The Guaranty, dated as of the Closing Date, made by LNC in ------------ favor of the Lenders and the Administrative Agent in the form attached hereto as Exhibit C-2. - ----------- Loan. The loan made or to be made by the Lenders to the Borrower on the ---- Closing Date in the aggregate principal amount of $5,600,000,000.00 pursuant to (S)2.1. Loan Agreement. This Loan Agreement, including the Schedules and Exhibits -------------- hereto. Loan Documents. This Loan Agreement, the Notes, and the Security -------------- Documents. Long Term Senior Debt. See the definition of "Debt Rating". --------------------- Management Agreement. The Management Services Agreement under which LNC, -------------------- directly and through its Subsidiaries, provides management services to FNV Capital and its Subsidiaries implemented pursuant to the Reorganization Plan. Material Adverse Effect. With respect to any event or occurrence of ----------------------- whatever nature (including any adverse determination in any litigation, arbitration or governmental investigation or proceeding): (a) a material adverse effect on the financial condition or assets of the Borrower, individually or the Borrower and its Subsidiaries, taken as a whole; (b) a material adverse effect on the ability of BH or the Borrower to perform any of their respective obligations under any of the Loan Documents to which either of them is a party; or (c) any impairment of the validity, binding effect or enforceability of this Loan Agreement or any of the other Loan Documents, any impairment of the rights, remedies or benefits available to the Administrative Agent or any Lender under any Loan Document or any impairment of the attachment, perfection or priority of any Lien of the Administrative Agent under the Security Documents. Maturity Date. August 20, 2006. ------------- Moody's. See the definition of "Debt Rating". ------- Multiemployer Plan. Any multiemployer plan within the meaning of (S)3(37) ------------------ of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate. Notes. See (S)2.3. ----- Obligations. All indebtedness, obligations and liabilities of the Borrower ----------- to any of the Lenders and the Administrative Agent, individually or collectively, existing on the date of this Loan Agreement or arising thereafter, direct or indirect, joint or several, absolute or contingent, -11- matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Loan Agreement or any of the other Loan Documents or in respect of the Loan made or any of the Notes, or other instruments at any time evidencing any thereof. Outstanding. With respect to the Loan, the aggregate unpaid principal ----------- thereof as of any date of determination. PBGC. The Pension Benefit Guaranty Corporation created by (S)4002 of ERISA ---- and any successor entity or entities having similar responsibilities. Permitted Liens. Liens permitted by (S)6.2.1. --------------- Person. Any individual, corporation, limited liability company, ------ partnership, limited liability partnership, trust, other unincorporated association, business, or other legal entity, and any Governmental Authority. Pledge Agreement. The Pledge Agreement, dated as of the date hereof, ---------------- between the Borrower and the Administrative Agent pursuant to which the Borrower pledges to the Administrative Agent, for the benefit of the Lenders and the Administrative Agent, all of its right, title and interest in the Berkadia Note and grants to the Administrative Agent for the benefit of the Lenders and the Administrative Agent, a first priority security interest in all of its rights under the FINOVA Credit Agreement, such agreement to be substantially in the form of Exhibit D hereto. ------- - Pricing Grid. The Borrower's Applicable Margin and Facility Fee rates ------------ shall be determined pursuant to the Pricing Grid set forth below, in accordance with the definition of Pricing Level: --------------------------------------------- Pricing Applicable Level Margin Facility Fee --------------------------------------------- I .25% .05% --------------------------------------------- II .28% .07% --------------------------------------------- Pricing Level. Pricing Level I or Pricing Level II, whichever shall apply, ------------- at any date. Any change to a Pricing Level based on the Debt Rating shall be automatically effective as of the date such Debt Rating is publicly announced by Standard & Poor's, Moody's, or any Successor Rating Agency, as the case may be. Pricing Level I. Any period during which the Debt Rating is AAA or better --------------- (as rated by Standard & Poor's) and/or Aaa or better (as rated by Moody's). -12- Pricing Level II. Any period during which (a) the Debt Rating is lower ---------------- than AAA (as rated by Standard & Poor's) and lower than Aaa (as rated by Moody's) and (b) Pricing Level I does not apply. Qualified Conduit Lender. A Conduit Lender which issues Commercial Paper ------------------------ rated at least "P-1" by Moody's or "A-1" by Standard & Poor's or is otherwise approved in writing by the Borrower. Record. The grid attached to a Note, or the continuation of such grid, or ------ any other similar record, including computer records, maintained by any Lender with respect to that portion of the Loan referred to in such Lender's Note. Register. See (S)10.3. -------- Reorganization Plan. The Third Amended and Restated Joint Plan of ------------------- Reorganization of Debtors Under Chapter 11 of the Bankruptcy Code of FINOVA Group, FNV Capital and seven other of their Subsidiaries, Case Nos. 01-0697 (PJW) through 01-0705 (PJW), as approved and confirmed by the United States Bankruptcy Court, District of Delaware, on August 10, 2001. Required Lenders. As of any date, at least two Lenders (unless there is ---------------- only one Lender hereunder, in which case, one Lender) holding at least fifty-one percent (51%) of the outstanding principal amount of the Notes on such date. Security Documents. The Guaranties and the Pledge Agreement. ------------------ Standard & Poor's. See the definition of "Debt Rating". ----------------- Structuring Fee. See (S)3.1. --------------- Structuring Fee Letter. The fee letter dated as of the date hereof among ---------------------- the Borrower and the Administrative Agent. Subsidiary. Any corporation, association, trust, or other business entity ---------- of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority (by number of votes) of the outstanding Voting Stock, provided, however, that in no event shall FINOVA -------- ------- Group or any of its Subsidiaries be deemed Subsidiaries of the Borrower. Successor Rating Agency. See the definition of "Debt Rating". ----------------------- UCC. The Uniform Commercial Code as in effect in the State of New York. --- Voting Stock. Stock or similar interests, of any class or classes (however ------------ designated), the holders of which are at the time entitled, as such holders, to vote for the election of a majority of the directors (or persons performing similar functions) of the corporation, association, trust or other business entity involved, whether or not the right so to vote exists by reason of the happening of a contingency. 1.2. Rules of Interpretation. ----------------------- -13- (a) A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Loan Agreement. (b) The singular includes the plural and the plural includes the singular. (c) A reference to any law includes any amendment or modification to such law. (d) A reference to any Person includes its permitted successors and permitted assigns. (e) Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP applied on a consistent basis by the accounting entity to which they refer. (f) The words "include", "includes" and "including" are not limiting. (g) All terms not specifically defined herein or by GAAP, which terms are defined in the UCC, have the meanings assigned to them therein, with the term "instrument" being that defined under Article 9 of the UCC. ---------- (h) Reference to a particular "(S)" refers to that section of this Loan Agreement unless otherwise indicated. (i) The words "herein", "hereof", "hereunder" and words of like import shall refer to this Loan Agreement as a whole and not to any particular section or subdivision of this Loan Agreement. (j) Unless otherwise expressly indicated, in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including," the words "to" and "until" each mean "to but excluding," and the word "through" means "to and including." (k) This Loan Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are, however, cumulative and are to be performed in accordance with the terms thereof. (l) This Loan Agreement and the other Loan Documents are the result of negotiation among, and have been reviewed by counsel to, among others, the Administrative Agent and the Borrower and are the product of discussions and negotiations among all parties. Accordingly, this Loan Agreement and the other Loan Documents are not intended to be construed against the Administrative Agent or any of the Lenders merely on account of the Administrative Agent's or any Lender's involvement in the preparation of such documents. -14- 2. THE LOAN. -------- 2.1. Funding. Subject to the terms and conditions set forth in this Loan ------- Agreement, each Lender shall lend to the Borrower on the Closing Date the amount of its Commitment Percentage of the principal amount of $5,600,000,000. 2.2. Facility Fee. The Borrower agrees to pay to the Administrative Agent ------------ for the accounts of the Lenders in accordance with their respective Commitment Percentages a facility fee (the "Facility Fee") calculated at the rate per annum -------- --- determined as set forth in the Pricing Grid with respect to the Facility Fee as in effect from time to time based on the daily outstanding principal amount of the Loan. The Facility Fee shall be payable quarterly in arrears on January 7, April 7, July 7, and October 7 of each year for the immediately preceding quarter, commencing on the first such date following the date hereof, with a final payment on the Maturity Date or any earlier date on which the Loan has been repaid. 2.3. The Notes. The Loan shall be evidenced by separate promissory notes --------- of the Borrower in substantially the form of Exhibit A hereto (each a "Note"), ------- - ---- dated the Closing Date (or such other date on which a Lender may become a party hereto in accordance with (S)10 hereof) and completed with appropriate insertions. One Note shall be payable to the order of each Lender in a principal amount equal to such Lender's Commitment Percentage of the Loan and representing the obligation of the Borrower to pay to such Lender such principal amount or, if less, the outstanding amount of such Lender's Commitment Percentage of the Loan, plus interest accrued thereon, as set forth below. The Borrower irrevocably authorizes each Lender to make or cause to be made a notation on such Lender's Record reflecting the original principal amount of such Lender's Commitment Percentage of the Loan and, at or about the time of such Lender's receipt of any principal payment on such Lender's Note, an appropriate notation on such Lender's Record reflecting such payment. The aggregate unpaid amount set forth on such Lender's Record shall be prima facie evidence of the principal ----- ----- amount thereof owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such amount on such Lender's Record shall not affect the obligations of the Borrower hereunder or under any Note to make payments of principal of and interest on any Note when due. 2.4. Repayment of Loan. ----------------- 2.4.1. Payment at Maturity. The Borrower promises to pay to the ------------------- Administrative Agent for the account of the Lenders the outstanding principal amount of the Loan on the Maturity Date. 2.4.2. Mandatory Prepayments. Not later than five (5) Business Days --------------------- following receipt thereof, the Borrower shall pay to the Administrative Agent for the respective accounts of the Lenders an amount equal to one hundred percent (100%) of the amount of any principal payment on the FINOVA Loan received from FNV Capital; provided, however, that the Borrower, at -------- ------- its option, may delay any payment hereunder until the end of the next expiring Interest Period. Notwithstanding the foregoing, if any payments have been required under (S)2.4.3, at the time of making any such payment pursuant to this (S)2.4.2, the Borrower shall be permitted to reduce the amount of such payment by an amount equal to the amount of all payments made pursuant to (S)2.4.3 which have not previously been applied to reduce payments pursuant to this (S)2.4.2. -15- Payments under this (S)2.4.2 shall be applied to the repayment of principal. All payments of principal made pursuant to this (S)2.4.2 shall be allocated among the Lenders in proportion, as nearly as practicable, to the respective outstanding amounts of each Lender's Note, with adjustments to the extent practicable to equalize any prior prepayments not exactly in proportion. No amounts repaid pursuant to this (S)2.4.2 may be reborrowed. The Borrowers shall provide written notice to the Administrative Agent, at least two (2) Business Days prior to each such prepayment of the amount of the principal payment it has received or expects to receive from FNV Capital and the corresponding amount of its expected prepayment of the Loan. 2.4.3. Loan Coverage. If the Asset Value as of the end of any calendar ------------- month, as reflected on the certificate delivered pursuant to (S)5.4(g), is less than 1.2 times the outstanding principal amount of the Loan as of the end of such month, then the Borrower shall, concurrently with the delivery of such certificate, prepay the Loan in the amount necessary so that the Asset Value is at least 1.2 times the outstanding principal amount of the Loan, after giving effect to such prepayment. 2.5. Optional Prepayment of Loan. The Borrower shall have the right at any --------------------------- time to prepay the Notes on or before the Maturity Date, as a whole, or in part, upon not less than five (5) Business Days prior written notice to the Administrative Agent, without premium or penalty, provided that (a) each partial -------- prepayment shall be in the principal amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof (b) no portion of the Loan bearing interest at the LIBOR Rate or the CP Rate may be prepaid pursuant to this (S)2.5 except on the last day of the Interest Period relating thereto unless the Borrower pays the Lenders the amounts required pursuant to (S)3.10 hereof and (c) each partial prepayment shall be allocated among the Lenders, in proportion, as nearly as practicable, to the respective outstanding amount of each Lender's Note, with adjustments to the extent practicable to equalize any prior prepayments not exactly in proportion. Any prepayment of principal of the Loan shall include all interest accrued to the date of prepayment. No amount repaid pursuant to this (S)2.5 may be reborrowed. 2.6. Optional Cancellation of Loan. Prior to the Closing Date, the Borrower ----------------------------- may, at its option, cancel, in whole or in part, the amount of the Loan to be made on the Closing Date upon not less than five (5) Business Days prior written notice to the Administrative Agent, provided that any partial cancellation shall be in the principal amount of $15,000,000 or an integral multiple of $1,000,000 in excess thereof. 2.7. Interest on Loan. ---------------- 2.7.1. Interest Rates. Except as otherwise provided in (S)3.11, the -------------- Loan shall bear interest during each Interest Period relating to all or any portion of the Loan at the following rates: (a) To the extent that all or any portion of the Loan bears interest during such Interest Period at the Base Rate (which will only occur in the event that the LIBOR Rate is unavailable pursuant to (S)3.5 or (S)3.6), the Loan or such portion shall bear interest during such Interest Period at the Base Rate. -16- (b) To the extent that all or any portion of the Loan bears interest during such Interest Period based on the LIBOR Rate, the Loan or such portion shall bear interest during such Interest Period at the rate per annum equal to the LIBOR Rate determined for such Interest Period, plus the ---- Applicable Margin as in effect from time to time. All portions of the Loan advanced by Lenders other than Conduit Lenders shall, except to the extent provided in paragraph (a), bear interest based on the LIBOR Rate. Additionally with respect to any Conduit Lender that is not a Qualified Conduit Lender (and for so long as it fails to be a Qualified Conduit Lender) and as provided in (S)2.8.1 with respect to CP Disruption Events, all portions of the Loan owing to such Conduit Lender shall be LIBOR Rate Loans. (c) To the extent that all or any portion of the Loan bears interest during such Interest Period based on the CP Rate, the Loan or such portion owing to each Qualified Conduit Lender shall bear interest during such Interest Period at the rate per annum equal to the CP Rate determined by such Conduit Lender for such Interest Period plus the Applicable Margin as ---- in effect from time to time. Except to the extent provided in paragraph (b) above, all portions of the Loan owing to Conduit Lenders shall be CP Rate Loans. 2.7.2. Interest Payments. The Borrower promises to pay interest on the ----------------- Loan or any portion thereof outstanding during each Interest Period in arrears on each Interest Payment Date applicable to such Interest Period. On or before the third Business Day preceding each Interest Payment Date, each Conduit Lender shall notify the Administrative Agent as to the Interest Amount for such Conduit Lender that will be due and payable on such Interest Payment Date by delivering to the Administrative Agent a certificate in the form attached as Exhibit F ------- - hereto. On or before the second Business Day preceding each Interest Payment Date, the Administrative Agent shall notify the Borrower of the Aggregate Interest Amount for the Interest Period ending on such Interest Payment Date. On each Interest Payment Date, the Borrower shall pay to the Administrative Agent an amount equal to the Aggregate Interest Amount for the Interest Period ending on such Interest Payment Date in respect of CP Rate Loans. Upon receipt of such amount the Administrative Agent shall pay to each Conduit Lender its Interest Amount for such Interest Period. 2.8. Interest Options. ---------------- 2.8.1. CP Rate Loans. Upon the expiration of each Interest Period in ------------- respect of a CP Rate Loan, such CP Rate Loan shall automatically be continued as a CP Rate Loan for an additional Interest Period, unless the Administrative Agent receives a Conversion Notice from a Conduit Lender that the CP Rate Loan of such Conduit Lender is to be converted into a LIBOR Rate Loan. Any such conversion shall be subject to (S)2.7.1. Each Conversion Notice shall be delivered pursuant to this (S)2.8.1 at least three (3) Business Days prior to the expiration of the Interest Period then applicable to such CP Rate Loan. In the event that in the case of any Conduit Lender (a) such Lender is not at such time a Qualified Conduit Lender, (b) a CP Disruption Event occurs, (c) such Lender elects to convert its portion of the Loan to a LIBOR Rate Loan, or (d) such Conduit Lender's -17- Liquidity Provider fails to renew its Liquidity Commitment, and such Liquidity Commitment will expire within forty (40) days, then all CP Rate ---- Loans of such Conduit Lender shall be converted to LIBOR Rate Loans at the end of the applicable Interest Period for such CP Rate Loans, with no prior notice being required in the case of any condition referred to in clause (a), (b) or (d), and the portion of the Loan advanced by such Conduit Lender shall, until no condition referred to in clause (a), (b) or (d) above is continuing, be LIBOR Rate Loans. 2.8.2. LIBOR Rate Loans. Upon the expiration of each Interest Period ---------------- in respect of a LIBOR Rate Loan, such LIBOR Rate Loan shall automatically be continued as a LIBOR Rate Loan for an additional Interest Period, unless the relevant Lender (a) is a Qualified Conduit Lender and (b) delivers a Conversion Notice providing that such LIBOR Rate Loan shall be converted into a CP Rate Loan at least three (3) Business Days prior to the expiration of the Interest Period then applicable to such LIBOR Rate Loan. 3. CERTAIN GENERAL PROVISIONS. -------------------------- 3.1. Structuring Fee. The Borrower agrees to pay to the Administrative --------------- Agent for the accounts of the Lenders on the Closing Date a structuring fee (the "Structuring Fee") as set forth in the Structuring Fee Letter. --------------- 3.2. Administrative Agent's Fee. The Borrower shall pay to the -------------------------- Administrative Agent for its own account certain Administrative Agent's fees (the "Administrative Agent's Fees") as set forth in the Administrative Agent's -------------- ------- ---- Fee Letter. 3.3. Funds for Payments. ------------------ 3.3.1. Payments to Administrative Agent. All payments of principal, -------------------------------- interest, Fees and any other amounts due hereunder or under any of the other Loan Documents shall be made on the due date thereof to the Administrative Agent in Dollars, for the respective accounts of the Lenders and the Administrative Agent, at the Administrative Agent's Office or at such other place that the Administrative Agent may from time to time designate, in each case on or prior to 1:00 p.m. (Boston, Massachusetts time or other local time at the place of payment) and in immediately available funds. 3.3.2. No Offset, etc. All payments by the Borrower hereunder and --------------- under any of the other Loan Documents shall be made without recoupment, setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrower is compelled by law to make such deduction or withholding. Subject to (S)3.3.3, if any such obligation is imposed upon the Borrower with respect to any amount payable by it hereunder or under any of the other Loan Documents, the Borrower will pay to the Administrative Agent, for the account of the Lenders or (as the case may be) the Administrative Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Lenders or the Administrative Agent to receive the same net -18- amount which the Lenders or the Administrative Agent would have received on such due date had no such obligation been imposed upon the Borrower. However, for this purpose, additional amounts will not include (i) in the case of each Lender, each Liquidity Provider and the Administrative Agent, taxes measured by its net income and franchise taxes imposed on it by the jurisdiction (or any political subdivision thereof) under the laws of which it is organized and (ii) in the case of each Lender and each Liquidity Provider, taxes measured by its net income and franchise taxes imposed on it by the jurisdiction in which its lending office is located. The Borrower will deliver promptly to the Administrative Agent certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by the Borrower hereunder or under such other Loan Document. If the Borrower incurs any costs with respect to any Lender by reason of this (S)3.3.2, the Borrower will have the right to replace such Lender in accordance with the provisions of (S)3.12 hereof. 3.3.3. Non-U.S. Lenders. Each Lender, the Administrative Agent and ----------------- each Liquidity Provider that is not a U.S. Person as defined in Section 7701(a)(30) of the Code for federal income tax purposes (a "Non-U.S. -------- Lender") hereby agrees that it shall, prior to the date of the first ------ payment by the Borrower hereunder to be made to such Non-U.S. Lender or for such Non-U.S. Lender's account, and prior to the expiration or obsolescence of any previously delivered form, deliver to the Borrower and the Administrative Agent, as applicable, such certificates, documents or other evidence, as and when required by the Code or Treasury Regulations issued pursuant thereto, including (a) in the case of a Non-U.S. Lender that is a "bank" for purposes of Section 881(c)(3)(A) of the Code, two (2) duly completed copies of Internal Revenue Service Form W-8BEN (certifying as to entitlement to treaty benefits) or Form W-8ECI and any other certificate or statement of exemption required by Treasury Regulations, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Non-U.S. Lender establishing that with respect to payments of principal, interest or fees hereunder it is (i) not subject to United States federal withholding tax under the Code because such payment is effectively connected with the conduct by such Non-U.S. Lender of a trade or business in the United States or (ii) totally exempt from United States federal withholding tax under a provision of an applicable tax treaty and (b) in the case of a Non-U.S. Lender that is not a "bank" for purposes of Section 881(c)(3)(A) of the Code, a certificate in form and substance reasonably satisfactory to the Administrative Agent and the Borrower and to the effect that (i) such Non-U.S. Lender is not a "bank" for purposes of Section 881(c)(3)(A) of the Code, is not subject to regulatory or other legal requirements as a bank in any jurisdiction, and has not been treated as a bank for purposes of any tax, securities law or other filing or submission made to any governmental authority, any application made to a rating agency or qualification for any exemption from any tax, securities law or other legal requirements, (ii) is not a ten (10) percent shareholder for purposes of Section 881(c)(3)(B) of the Code and (iii) is not a controlled foreign corporation receiving interest from a related person for purposes of Section 881(c)(3)(C) of the Code, together with a properly completed Internal Revenue Service Form W-8BEN (certifying as to beneficial ownership), as applicable (or successor forms). Each Lender agrees that it shall, promptly upon a change of its lending office or the selection of any additional lending office, to the extent the forms previously delivered by it pursuant to this section are no -19- longer effective or accurate, and promptly upon the Borrower's or the Administrative Agent's reasonable request after the occurrence of any other event (including the passage of time) requiring the delivery of a Form W- 8BEN, Form W-8ECI or Form W-9 in addition to or in replacement of the forms previously delivered, deliver to the Borrower and the Administrative Agent, as applicable, a properly completed and executed Form W-8BEN, Form W-8ECI or Form W-9, as applicable (or any successor forms thereto). Each Lender also represents that it is not a "conduit entity" as described in U.S. Treasury Regulation (S)1.881-3(a)(4). The Borrower shall not be required to pay any additional amounts to any Non-U.S. Lender in respect of United States federal withholding tax pursuant to (S)3.3.2 above to the extent that the obligation to pay such additional amounts would not have arisen but for a failure by such Non-U.S. Lender to comply with the provisions of this (S)3.3.3 or to deliver the documents specified in this (S)3.3.3, including if such Non-U.S. Lender is not properly or legally entitled to use or deliver any of the forms set forth above (or any successor forms thereto) or on account of a Lender being a "conduit entity"; provided, -------- however, that the foregoing shall not relieve the Borrower of its ------- obligation to pay additional amounts pursuant to (S)3.3.2 in the event that, as a result of any change in any applicable law, treaty or governmental rule, regulation or order, or any change in interpretation, administration or application thereof, a Non-US Lender that was previously entitled to receive all payments under this Loan Agreement and the Notes without deduction or withholding of any United States federal income taxes is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Lender is not subject to withholding. If the Borrower incurs any costs with respect to any Lender by reason of this (S)3.3.3, the Borrower will have the right to replace such Lender in accordance with the provisions of (S)3.12 hereof. 3.4. Computations. All computations of interest on Base Rate Loans shall be ------------ based on a 365-day year and paid for the actual number of days elapsed, including the first day but excluding the last day of any calculation period. All computations of interest on LIBOR Rate Loans and CP Rate Loans and of Fees shall be based on a 360-day year and paid for the actual number of days elapsed, including the first day but excluding the last day of any calculation period. The Administrative Agent will provide the Borrower with notice of any Eurocurrency Reserve Rate that becomes applicable, including the rate thereof. Whenever a payment hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and interest shall accrue during such extension. The outstanding amount of the Loan as reflected on the Records from time to time shall be considered correct and binding on the Borrower unless within thirty (30) Business Days after receipt of any notice by the Administrative Agent or any of the Lenders of such outstanding amount, the Borrower shall notify such Lender to the contrary. 3.5. Inability to Determine LIBOR Rate. In the event, prior to the --------------------------------- commencement of any Interest Period relating to any LIBOR Rate Loan, the Administrative Agent shall determine that (a) adequate and reasonable methods do not exist for ascertaining the LIBOR Rate that would otherwise determine the rate of interest to be applicable to any LIBOR Rate Loan during any Interest Period or (b) the LIBOR Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to the Lenders and/or Liquidity Providers -20- of making or maintaining their LIBOR Rate Loans during such period, the Administrative Agent shall forthwith give notice of such determination (which shall be conclusive and binding on the Borrower and the Lenders) to the Borrower and the Lenders. In such event (a) any Conversion Request with respect to LIBOR Rate Loans shall be automatically withdrawn and shall be deemed a request for Base Rate Loans, (b) each LIBOR Rate Loan will automatically, on the last day of the then current Interest Period relating thereto, become a Base Rate Loan, and (c) the obligations of the Lenders to make LIBOR Rate Loans shall be suspended until the Administrative Agent determines that the circumstances giving rise to such suspension no longer exist, whereupon the Administrative Agent shall so notify the Borrower and the Lenders. 3.6. Illegality. Notwithstanding any other provisions herein, if any change ---------- in law, regulation, treaty or directive or in the interpretation or application thereof shall make it unlawful for any Lender (or its Liquidity Provider) to make or maintain LIBOR Rate Loans, such Lender shall forthwith give notice of such circumstances to the Borrower and the other Lenders and thereupon (a) the commitment of such Lender to make LIBOR Rate Loans shall forthwith be suspended, (b) such Lender's Loans then outstanding as LIBOR Rate Loans, if any, shall be converted automatically to Base Rate Loans on the last day of each Interest Period applicable to such LIBOR Rate Loans or within such earlier period as may be required by law, and (c) the Borrower may replace such Lender in accordance with the provisions of (S)3.12 hereof. The Borrower hereby agrees promptly to pay the Administrative Agent for the account of such Lender, upon demand by such Lender, any additional amounts necessary to compensate such Lender for any costs incurred by such Lender (or its Liquidity Provider) in making any conversion in accordance with this (S)3.6, including any interest or fees payable by such Lender to lenders of funds obtained by it in order to make or maintain its LIBOR Rate Loans hereunder. 3.7. Additional Costs, etc. If any change in applicable law, which --------------------- expression, as used herein, includes statutes, rules and regulations thereunder and interpretations thereof by any competent court or by any governmental or other regulatory body or official charged with the administration or the interpretation thereof and requests, directives, instructions and notices at any time or from time to time hereafter made upon or otherwise issued to any Lender, Liquidity Provider or the Administrative Agent by any central bank or other fiscal, monetary or other authority (whether or not having the force of law), shall: (a) subject any Lender or Liquidity Provider or the Administrative Agent to any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to this Loan Agreement, the other Loan Documents, such Lender's Commitment or Liquidity Provider's Liquidity Commitment, or the Loan (other than taxes based upon or measured by the income or profits of such Lender or the Administrative Agent), or (b) materially change the basis of taxation (except for changes in taxes on income or profits) of payments to any Lender or Liquidity Provider of the principal of or the interest on the Loans or any other amounts payable to any Lender, Liquidity Provider or the Administrative Agent under this Loan Agreement or any of the other Loan Documents, or -21- (c) impose or increase or render applicable (other than to the extent specifically provided for elsewhere in this Loan Agreement) any special deposit, reserve, assessment, liquidity, capital adequacy or other similar requirements (whether or not having the force of law) against assets held by, or deposits in or for the account of, or loans by, or letters of credit issued by, or commitments of an office of any Lender or Liquidity Provider, or (d) impose on any Lender or Liquidity Provider or the Administrative Agent any other conditions or requirements with respect to this Loan Agreement, the other Loan Documents, the Loan, such Lender's Commitment or Liquidity Provider's Liquidity Commitment or any class of loans or commitments of which any of the Loans or such Lender's Commitment or Liquidity Provider's Liquidity Commitment forms a part, and the result of any of the foregoing is (i) to increase the cost to any Lender or Liquidity Provider of making, funding, issuing, renewing, extending or maintaining the Loan or such Lender's Commitment or Liquidity Provider's Liquidity Commitment, or (ii) to reduce the amount of principal, interest, or other amount payable to such Lender or Liquidity Provider or the Administrative Agent hereunder on account of such Lender's Commitment or Liquidity Provider's Liquidity Commitment, or any of the Loans, or (iii) to require such Lender or Liquidity Provider or the Administrative Agent to make any payment or to forego any interest or other sum payable hereunder, the amount of which payment or foregone interest or other sum is calculated by reference to the gross amount of any sum receivable or deemed received by such Lender, Liquidity Provider or the Administrative Agent from the Borrower hereunder, and so long as such additional costs, reductions, payments or foregone interest or other sums are (x) applicable to and generally being collected by such Lender from all of its similarly situated customers in good faith, (y) not incurred due to a CP Disruption Event, and (z) not otherwise recovered or recoverable pursuant to another provision of this Loan Agreement, then, and in each such case, the Borrower will, upon demand made by such Lender or (as the case may be) the Administrative Agent at any time and from time to time and as often as the occasion therefor may arise, pay to such Lender or the Administrative Agent such additional amounts as will be sufficient to compensate such Lender or Liquidity Provider to such Lender or the Administrative Agent for such additional cost, reduction, payment or foregone interest or other sum which has been incurred by such Lender or Liquidity Provider within the ninety (90) days prior to the date of such demand. If the Borrower incurs any costs with respect to any given Lender by reason of this (S)3.7, the Borrower will have the right to replace such Lender in accordance with the provisions of (S)3.12 hereof. 3.8. Capital Adequacy. If after the date hereof any Lender or Liquidity ---------------- Provider to such Lender or the Administrative Agent determines that (a) the adoption of or change in any law, governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) regarding capital requirements for Lenders, Liquidity Providers or financial holding -22- companies or any change in the interpretation or application thereof by a Governmental Authority with appropriate jurisdiction, or (b) compliance by such Lender or its Liquidity Provider or the Administrative Agent or any corporation controlling such Lender or its Liquidity Provider or the Administrative Agent with any law, governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) of any such entity regarding capital adequacy, has the effect of reducing the return on such Lender's or its Liquidity Provider's or the Administrative Agent's commitment with respect to the Loan to a level below that which such Lender or its Liquidity Provider or the Administrative Agent could have achieved (it being understood that, in the absence of a change in law (including related rules and regulations) occurring after the date hereof, the inclusion of any portion of the Loan of any Conduit Lender in the determination of its Liquidity Provider's capital shall not be deemed to have such an effect) but for such adoption, change or compliance (taking into consideration such Lender's or the Administrative Agent's then existing policies with respect to capital adequacy and assuming full utilization of such entity's capital) by any amount deemed by such Lender or its Liquidity Provider or (as the case may be) the Administrative Agent to be material, then such Lender or the Administrative Agent may notify the Borrower of such fact. The Borrower agrees to pay such Lender or (as the case may be) the Administrative Agent for the amount of such reduction in the return on capital as and when such reduction is determined upon presentation by such Lender or (as the case may be) the Administrative Agent of a certificate in accordance with (S)3.9 hereof. Each Lender or its Liquidity Provider shall allocate such cost increases among its customers in good faith and on an equitable basis. 3.9. Certificate. A certificate setting forth any additional amounts ----------- payable pursuant to (S)3.7 or (S)3.8 and a brief explanation of such amounts which are due, submitted by any Lender on behalf of itself and/or its Liquidity Provider or the Administrative Agent to the Borrower, shall be conclusive, absent manifest error, that such amounts are due and owing (other than any loss, cost or expense resulting from the gross negligence or willful misconduct of such Lender). 3.10. Indemnity. The Borrower agrees to indemnify each Lender and to hold --------- each Lender harmless from and against any loss, cost or expense that such Lender may sustain or incur as a consequence of (a) default by the Borrower in payment of the principal amount of or any interest on any LIBOR Rate Loans or CP Rate Loans as and when due and payable, including any such loss or expense arising from interest or fees payable by such Lender to banks of funds obtained by it in order to maintain its LIBOR Rate Loans or CP Rate Loans, or (b) the making of any payment of a LIBOR Rate Loan or CP Rate Loan on a day that is not the last day of the applicable Interest Period with respect thereto, including interest or fees payable by such Lender to lenders of funds obtained by it in order to maintain any such Loans. 3.11. Interest After Default. Overdue principal and (to the extent ---------------------- permitted by applicable law) interest on the Loan and all other overdue amounts payable hereunder or under any of the other Loan Documents shall bear interest compounded monthly and payable on demand at a rate per annum equal to two percent (2.0%) above the Base Rate until such amount shall be paid in full (after as well as before judgment). 3.12. Replacement of Lenders. If any Lender (an "Affected Lender") (a) ---------------------- -------- ------ converts its CP Rate Loans into LIBOR Rate Loans as a result of a CP Disruption Event, (b) in the case of a Conduit Lender, such Conduit Lender's Liquidity Provider or Commercial Paper issued by -23- such Conduit Lender is rated below "P-1" by Moody's or below "A-1" by Standard & Poor's, (c) requests or requires the Borrower to provide compensation to it pursuant to (S)(S)3.3.2, 3.3.3, 3.6, 3.7 or 3.8, or (d) is a Delinquent Lender, then the Borrower may, so long as no Default or Event of Default has occurred and is then continuing, within ninety (90) days of receipt of such demand or notice, or the occurrence of such other event causing the Borrower to be required to pay such compensation or causing (S)(S)3.3.2, 3.3.3, 3.6, 3.7, 3.8 or 9.5.3 to be applicable, or default, as the case may be, by notice (a "Replacement Notice") in writing to the Administrative ----------- ------ Agent and such Affected Lender (i) request the Affected Lender to cooperate with the Borrower in obtaining one or more replacement Lenders satisfactory to the Administrative Agent and the Borrower (each, a "Replacement Lender"); (ii) ----------- ------ request the non-Affected Lenders to acquire and assume all or part of the Affected Lender's Loans as provided herein, but none of such Lenders shall be under an obligation to do so; or (iii) designate one or more Replacement Lenders approved by the Administrative Agent, such approval not to be unreasonably withheld or delayed. If any one or more satisfactory Replacement Lenders shall be obtained, and/or if any one or more of the non-Affected Lenders shall agree to acquire and assume all or part of the Affected Lender's Loans, then such Affected Lender shall assign, in accordance with (S)10, all or such part of its portion of the Loan, Notes and other rights and obligations under this Loan Agreement and all other Loan Documents to such Replacement Lenders or non- Affected Lenders, as the case may be, in exchange for payment of the principal amount so assigned and all interest and fees accrued on the amount so assigned, plus all other Obligations then due and payable to the Affected Lender; provided, however, that (A) such assignment shall be without recourse, - -------- ------- representation or warranty and shall be on terms and conditions reasonably satisfactory to such Affected Lender and such Replacement Lenders and/or non- Affected Lenders, as the case may be, and (B) prior to any such assignment, the Borrower shall have paid to such Affected Lender all amounts properly demanded and unreimbursed under (S)(S)3.7, 3.8 and 3.10. Upon the effective date of such assignment, the Borrower shall issue replacement Notes to such Replacement Lender and/or non-Affected Lenders, as the case may be, and each such institution shall become a "Lender" for all purposes under this Loan Agreement and the other Loan Documents, and upon receipt of such replacement Notes, the existing Notes shall be marked "cancelled" and returned to the Borrower. 3.13. Conduit Lenders. --------------- (a) It is the intent of the parties hereto that, to the extent that Commercial Paper may be issued pursuant to and in accordance with the terms of the constituent and governing documents applicable to any Qualified Conduit Lender, the portion of the Loan to be funded by such Conduit Lender will be funded through the issuance of Commercial Paper and the outstanding principal amount of maturing Commercial Paper will be paid through the issuance of additional Commercial Paper. Notwithstanding the foregoing, if at any time Commercial Paper cannot be issued in accordance therewith for any reason, upon the maturity of any outstanding Commercial Paper, amounts owing with respect thereto will be paid by the Liquidity Provider of such Conduit Lender in accordance with the terms of the applicable Liquidity Provider Agreement. (b) Each Conduit Lender will at all times provide a Liquidity Commitment with a Liquidity Provider pursuant to the terms of a Liquidity Provider Agreement. All such Liquidity Commitments may be renewable by the Conduit Lender for successive periods of up to 364 -24- days in accordance with the provisions of the applicable Liquidity Provider Agreement to be renewed. Notwithstanding the drawing down of any amounts under a Liquidity Commitment, the portion of the Loan of the Conduit Lender making such draw shall continue to be due on the Maturity Date or such earlier time as may be required pursuant to (S)2.4 hereof. 4. REPRESENTATIONS AND WARRANTIES. ------------------------------ The Borrower represents and warrants to the Lenders and the Administrative Agent that, as of the date hereof and as of the Closing Date: 4.1. Corporate Authority. ------------------- 4.1.1. Incorporation; Good Standing. The Borrower (a) is a limited ---------------------------- liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, (b) has all requisite limited liability company power to own its property and conduct its business as now conducted and as presently contemplated, and (c) is in good standing as a foreign limited liability company and is duly authorized to do business in each jurisdiction where such qualification is necessary except where a failure to be so qualified would not have a Material Adverse Effect. 4.1.2. Authorization. The execution, delivery and performance of ------------- this Loan Agreement and the other Loan Documents to which the Borrower is a party and the transactions contemplated hereby and thereby (a) are within the limited liability company authority of the Borrower, (b) have been duly authorized by all necessary limited liability company proceedings, (c) do not and will not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which the Borrower is subject or any judgment, order, writ, injunction, license or permit applicable to the Borrower except such as would not have a Material Adverse Effect and (d) do not conflict with any provision of the Governing Documents of, or any agreement or other instrument binding upon, the Borrower. 4.1.3. Enforceability. The execution and delivery of this Loan -------------- Agreement and the other Loan Documents to which the Borrower is a party will result in valid and legally binding obligations of the Borrower enforceable against it in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors' rights and except to the extent that availability of certain equitable remedies is subject to the discretion of the court before which any proceeding therefor is brought. 4.2. Governmental Approvals. The execution, delivery and performance by the ---------------------- Borrower of this Loan Agreement and the other Loan Documents to which the Borrower is a party and the transactions contemplated hereby and thereby do not require the approval or consent of, or filing with, any governmental agency or authority other than those already obtained, except where the failure to obtain such approval or consent, or make such filing would not have a Material Adverse Effect. -25- 4.3. Title to Properties; Leases. The Borrower owns all of the assets --------------------------- reflected in the balance sheet of the Borrower as at the Closing Date subject to no Liens or other rights of others, except Permitted Liens. 4.4. Financial Statements. -------------------- 4.4.1. Fiscal Year. The Borrower has a fiscal year which is the twelve ----------- months ending on December 31 of each calendar year. 4.4.2. Financial Statements. There has been furnished to each of the -------------------- Lenders a pro forma balance sheet of the Borrower as at the Closing Date. --- ----- Such balance sheet has been prepared in accordance with GAAP and fairly presents the assets and liabilities of the Borrower as at the Closing Date. There are no contingent liabilities of the Borrower as of such date involving material amounts, known to the officers of the Borrower, which were required by GAAP to be disclosed in such balance sheet and/or the notes related thereto and were not so disclosed. 4.5. No Material Adverse Changes, etc. Since the Balance Sheet Date there -------------------------------- has been no event or occurrence which has had a Material Adverse Effect. 4.6. Franchises, Patents, Copyrights, etc. The Borrower possesses all ------------------------------------ franchises, patents, copyrights, trademarks, trade names, licenses and permits, and rights in respect of the foregoing, if any, adequate for the conduct of its business substantially as now conducted without known conflict with any rights of others, except where failure to possess any such franchise, patent, copyright, trademark, license, permit or right would not reasonably be expected to have a Material Adverse Effect. 4.7. Litigation. There are no actions, suits, proceedings or investigations ---------- of any kind pending or threatened against the Borrower before any Governmental Authority, that, would if adversely determined, in any case or in the aggregate, (i) have a Material Adverse Effect or (ii) materially impair the right of the Borrower to carry on business substantially as now conducted, or result in any substantial liability not adequately covered by insurance, or for which adequate reserves are not maintained on the consolidated balance sheet of the Borrower. 4.8. No Materially Adverse Contracts, etc. The Borrower is not subject to ------------------------------------ any Governing Document or other legal restriction, or any judgment, decree, order, law, statute, rule or regulation that has or is expected in the future to have a Material Adverse Effect. The Borrower is not a party to any contract or agreement that has or is reasonably expected, in the judgment of the Borrower's officers, to have, any Material Adverse Effect. 4.9. Compliance with Other Instruments, Laws, etc. The Borrower is not in -------------------------------------------- violation of any provision of its Governing Documents, or any agreement or instrument to which it may be subject or by which it or any of its properties may be bound or any decree, order, judgment, statute, license, rule or regulation, in any of the foregoing cases in a manner that would reasonably be expected to have a Material Adverse Effect. -26- 4.10. Tax Status. The Borrower has not made, and has not been required ---------- under any applicable laws or regulations to have made, any tax filings or payments of taxes to any jurisdiction to which it is subject. 4.11. No Event of Default. No Default or Event of Default has occurred and ------------------- is continuing. 4.12. Holding Company and Investment Company Acts. The Borrower is not a ------------------------------------------- "holding company", or a "subsidiary company" of a "holding company", or an ------- ------- ---------- ------- ------- ------- "affiliate" of a "holding company", as such terms are defined in the Public --------- ------- ------- Utility Holding Company Act of 1935; nor is it an "investment company", or an ---------- ------- "affiliated company" or a "principal underwriter" of an "investment company", as ---------- ------- --------- ----------- ---------- ------- such terms are defined in the Investment Company Act of 1940. 4.13. Absence of Financing Statements, etc. Except with respect to ------------------------------------ Permitted Liens, there is no financing statement, security agreement, chattel mortgage, real estate mortgage or other document filed or recorded with any filing records, registry or other public office, that purports to cover, affect or give notice of any present or possible future Lien on any assets or property of the Borrower or any rights relating thereto. 4.14. Employee Benefit Plans. The Borrower has no Employee Benefit Plans, ---------------------- Multiemployer Plans or Guaranteed Pension Plans and has no liability in respect of any Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan of any other ERISA Affiliate. 4.15. Use of Proceeds. --------------- 4.15.1. General. The proceeds of the Loan shall be used solely to ------- fund the obligations of the Borrower to lend $5,600,000,000 to FNV Capital as provided in the Reorganization Plan, such loan to be made pursuant to the FINOVA Loan Documents and to pay fees and expenses associated therewith and with the transactions contemplated hereby. 4.15.2. Regulations U and X. No portion of the Loan is to be used for ------------------- the purpose of purchasing or carrying any "margin security" or "margin ------ -------- ------ stock" as such terms are used in Regulations U and X of the Board of ----- Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224. 4.16. Environmental Compliance. The Borrower does not own or lease any real ------------------------ property and does not handle any Hazardous Substances or conduct any activity subject to Environmental Laws. 4.17. Subsidiaries, etc. The Borrower has no Subsidiaries. The Borrower is ----------------- not engaged in any joint venture or partnership with any other Person. 4.18. Reorganization Plan. A Final Order for each Chapter 11 Case is in ------------------- full force and effect. Upon the maturity (whether by acceleration or otherwise) of any of the obligations of FNV Capital or its Subsidiaries under any of the FINOVA Loan Documents, the Borrower shall -27- be entitled to immediate payment of such obligations and to enforce the remedies provided under such Loan Document without further application to or order by the Bankruptcy Court. 4.19. Disclosure. None of this Loan Agreement or any of the other Loan ---------- Documents contains any untrue statement of a material fact or omits to state a material fact (known to the executive officers of the Borrower in the case of any document or information not furnished by it) necessary in order to make the statements herein or therein, when taken as a whole, not misleading. 5. AFFIRMATIVE COVENANTS. --------------------- The Borrower covenants and agrees that, so long as the Loan or any Note is outstanding or any Lender has any obligation to make any portion of the Loan: 5.1. Punctual Payment. The Borrower will duly and punctually pay or cause ---------------- to be paid the principal and interest on the Loan, the Fees and all other amounts provided for in this Loan Agreement and the other Loan Documents to which the Borrower is a party, all in accordance with the terms of this Loan Agreement and such other Loan Documents. 5.2. Maintenance of Office. The Borrower will maintain its chief executive --------------------- office in Omaha, Nebraska, or at such other place in the United States of America as the Borrower shall designate upon written notice to the Administrative Agent, where notices, presentations and demands to or upon the Borrower in respect of the Loan Documents to which the Borrower is a party may be given or made. 5.3. Records and Accounts. The Borrower will (a) keep, and cause each of -------------------- its Subsidiaries to keep, true and accurate records and books of account in which full, true and correct entries will be made in accordance with GAAP, (b) maintain adequate accounts and reserves for all taxes (including income taxes), depreciation, depletion, obsolescence and amortization of its properties and the properties of its Subsidiaries, contingencies, and other reserves, and (c) at all times engage an internationally recognized ("Big 5") certified public accountant as the independent certified public accountants of the Borrower and its Subsidiaries and will not permit more than thirty (30) days to elapse between the cessation of such firm's (or any successor firm's) engagement as the independent certified public accountants of the Borrower and its Subsidiaries and the appointment in such capacity of a successor firm. 5.4. Financial Statements, Certificates and Information. The Borrower will -------------------------------------------------- deliver to each of the Lenders: (a) as soon as practicable, but in any event not later than ninety (90) days after the end of each fiscal year of the Borrower, the consolidated balance sheet of the Borrower and its Subsidiaries, as at the end of such year, and the related consolidated statement of income and consolidated statement of cash flow for such year, each setting forth in comparative form the figures for the previous fiscal year and all such consolidated statements to be in reasonable detail, prepared in accordance with GAAP, and certified without qualification as to scope of audit by internationally recognized ("Big 5") certified public accountants; provided -------- that, notwithstanding the foregoing, such financial statements shall not include FINOVA Group's financial position, results -28- or statements regardless of whether consolidation with FINOVA Group is required by GAAP; (b) as soon as practicable, but in any event not later than forty- five (45) days after the end of each of the first three fiscal quarters of the Borrower's fiscal year, copies of the unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such quarter, and the related consolidated statement of income and consolidated statement of cash flow for the portion of such fiscal year then elapsed, all in reasonable detail and prepared in accordance with GAAP, and accompanied by a certification by the principal financial or accounting officer of the Borrower that the information contained in such financial statements fairly presents the financial position of the Borrower and its Subsidiaries on the date thereof (subject to year-end adjustments); provided that, -------- notwithstanding the foregoing, such financial statements shall not include FINOVA Group's financial position, results or statements regardless of whether consolidation with FINOVA Group is required by GAAP; (c) as soon as practicable, but in any event not later than ten (10) Business Days after the Borrower's receipt thereof, the consolidated balance sheet of FINOVA Group, as at the end of each fiscal year, and the related consolidated statement of income and consolidated statement of cash flow for such year, each setting forth in comparative form the figures for the previous fiscal year and all such consolidated statements to be in reasonable detail, prepared in accordance with GAAP, and certified without qualification as to scope of audit by internationally recognized ("Big 5") certified public accountants. The Borrower hereby agrees that it shall require FINOVA Group to deliver such financial statements pursuant to the FINOVA Loan Documents within ninety (90) days after the end of each fiscal year of FINOVA Group; (d) as soon as practicable, but in any event not later than ten (10) Business Days after the Borrower's receipt thereof, copies of the unaudited consolidated balance sheet of FINOVA Group as at the end of each of the first three fiscal quarters of FINOVA Group's fiscal year, and the related consolidated statement of income and consolidated statement of cash flow for the portion of such fiscal year then elapsed, all in reasonable detail and prepared in accordance with GAAP. The Borrower hereby agrees that it shall require FINOVA Group to deliver such financial statements pursuant to the FINOVA Loan Documents within forty-five (45) days after the end of each of the first three fiscal quarters of FINOVA Group's fiscal year; (e) as soon as practicable, but in any event not later than ten (10) Business Days after the Borrower's receipt thereof, the annual financial projections of FINOVA Group and its Subsidiaries for at least the remaining term of the Loan, including, at a minimum, projected detailed consolidated balance sheets and income and cash flow statements of FINOVA Group and its Subsidiaries for the two next succeeding fiscal years, and a breakdown of such projections by fiscal quarter for the next succeeding fiscal year. The Borrower hereby agrees that it shall require FINOVA Group to deliver such projections pursuant to the FINOVA Loan Documents within twenty (20) days prior to the end of each fiscal year of FINOVA Group; -29- (f) as soon as practicable, but in any event not later than ten (10) Business Days after the Borrower's receipt thereof, a report of FINOVA Group and its Subsidiaries' investment in financing transactions (including discontinued operations), by line of business, accrual status and impaired/unimpaired status, as of the end of such fiscal quarter, the reserve for credit losses as of the end of such fiscal quarter and an analysis of write-offs and recoveries for such fiscal quarter. The Borrower hereby agrees that it shall require FINOVA Group to deliver such report pursuant to the FINOVA Loan Documents within forty-five (45) days after the end of each fiscal quarter of FINOVA Group; (g) on or before the fifth (5th) day of each month, a certification of Asset Value as of the end of the second preceding month (the "Calculation Date"), the first Calculation Date to be August 31, 2001, ----------- ---- divided by the outstanding principal amount of the Loan as of the ------- -- Calculation Date; provided, that such calculation may be based on FINOVA -------- Group's monthly financial statements or, if such financial statements have not been made available to the Borrower, upon estimates made by FINOVA Group that the Borrower believes to be reasonable after due inquiry, such certification to be substantially in the form of Exhibit E hereto; --------- (h) promptly upon receipt by the Borrower thereof, copies of all financial reporting information not otherwise delivered hereunder that the Borrower receives from FNV Capital pursuant to the FINOVA Loan Documents; and (i) from time to time such other financial data and information of the Borrower (including accountants' management letters) as the Administrative Agent or any Lender may reasonably request. 5.5. Notices. The Borrower will promptly notify the Administrative Agent ------- and each of the Lenders in writing of (a) the occurrence of any Default or Event of Default, (b) any adverse change in the long term senior unsecured debt rating of BH and (c) any other event or occurrence of which the Borrower has knowledge that would reasonably be expected to have a Material Adverse Effect. 5.6. Legal Existence; Maintenance of Properties. The Borrower will do or ------------------------------------------ cause to be done all things necessary to preserve and keep in full force and effect its legal existence, rights and franchises and those of its Subsidiaries. It (i) will cause all of its properties and those of its Subsidiaries used or useful in the conduct of its business or the business of its Subsidiaries to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment, (ii) will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Borrower may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times, and (iii) will, and will cause each of its Subsidiaries to, continue to engage primarily in the businesses now conducted by them and in related businesses; provided that nothing in this (S)5.6 shall prevent the Borrower from - -------- discontinuing the operation and maintenance of any of its properties or any of those of its Subsidiaries if such discontinuance is, in the judgment of the Borrower, desirable in the conduct of its or their business and that, together with all other discontinuances, does not in the aggregate have a Material Adverse Effect. -30- 5.7. Taxes. The Borrower will, and will cause each of its Subsidiaries to, ----- duly pay and discharge, or cause to be paid and discharged, before the same shall become overdue, all taxes, assessments and other governmental charges imposed upon it and its activities, or any part thereof, or upon the income or profits therefrom, provided that any such tax, assessment, charge, levy or claim -------- need not be paid if the validity or amount thereof shall currently be contested in good faith by appropriate proceedings and if the Borrower or such Subsidiary shall have set aside on its books adequate reserves with respect thereto; and provided further that the Borrower and each Subsidiary of the Borrower will pay - -------- ------- all such taxes, assessments, charges, levies or claims forthwith upon the commencement of proceedings to foreclose any Lien that may have attached as security therefor. 5.8. Inspection of Properties and Books, etc. The Borrower shall permit --------------------------------------- the Administrative Agent (on its own initiative, or upon the reasonable request of a Lender) and its designees, and following the occurrence of a Default or Event of Default, the Lenders, through the Administrative Agent or any of the Lenders' other designated representatives, to visit and inspect any of the properties of the Borrower or any of its Subsidiaries, to examine the books of account of the Borrower and its Subsidiaries (and to make copies thereof and extracts therefrom), and to discuss the affairs, finances and accounts of the Borrower and its Subsidiaries with, and to be advised as to the same by, its and their officers, all at such reasonable times and intervals as the Administrative Agent, or, following the occurrence of a Default or Event of Default, any Lender may reasonably request. 5.9. Compliance with Laws, Contracts, Licenses, and Permits. The Borrower ------------------------------------------------------ will, and will cause each of its Subsidiaries to, comply with (a) the applicable laws and regulations wherever its business is conducted, (b) the provisions of its Governing Documents, (c) all agreements and instruments by which it may be bound and (d) all applicable decrees, orders, and judgments, if, in any of the foregoing cases the failure to comply therewith would have a Material Adverse Effect. If any authorization, consent, approval, permit or license from any officer, agency or instrumentality of any government shall become necessary or required in order that the Borrower or any of its Subsidiaries may fulfill any of its obligations hereunder or any of the other Loan Documents to which the Borrower or such Subsidiary is a party, the Borrower will, or (as the case may be) will cause such Subsidiary to, immediately take or cause to be taken all reasonable steps within the power of the Borrower or such Subsidiary to obtain such authorization, consent, approval, permit or license and furnish the Administrative Agent and the Lenders with evidence thereof. 5.10. Use of Proceeds. The Borrower will use the proceeds of the Loan --------------- solely for the purposes set forth in (S)4.15.1. 5.11. Further Assurances. The Borrower will, and will cause each of its ------------------ Subsidiaries to, cooperate with the Lenders and the Administrative Agent and execute such further instruments and documents as the Lenders or the Administrative Agent shall reasonably request to carry out to their satisfaction the transactions contemplated by this Loan Agreement and the other Loan Documents. -31- 6. NEGATIVE COVENANTS. ------------------- The Borrower covenants and agrees that, so long as the Loan or any Note is outstanding or any Lender has any obligation to make any portion of the Loan: 6.1. Restrictions on Indebtedness. The Borrower will not, and will not ---------------------------- permit any of its Subsidiaries to, create, incur, assume, guarantee or be or remain liable, contingently or otherwise, with respect to any Indebtedness other than: (a) Indebtedness to the Lenders and the Administrative Agent arising under any of the Loan Documents; and (b) Indebtedness evidenced by Hedging Agreements. 6.2. Restrictions on Liens. --------------------- 6.2.1. Permitted Liens. The Borrower will not, and will not permit --------------- any of its Subsidiaries to, (a) create or incur or suffer to be created or incurred or to exist any Lien upon any of its property or assets of any character whether now owned or hereafter acquired, or upon the income or profits therefrom; (b) transfer any of such property or assets or the income or profits therefrom for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to payment of its general creditors; (c) acquire, or agree or have an option to acquire, any property or assets upon conditional sale or other title retention or purchase money security agreement, device or arrangement; or (d) suffer to exist for a period of more than thirty (30) days after the same shall have been incurred any Indebtedness or claim or demand against it that if unpaid might by law or upon bankruptcy or insolvency, or otherwise, be given any priority whatsoever over its general creditors; provided that the Borrower or any of its Subsidiaries may create or -------- incur or suffer to be created or incurred or to exist: (i) Liens to secure taxes, assessments and other government charges in respect of obligations not overdue or for which adequate reserves have been established (to the extent required by GAAP); (ii) deposits or pledges made in connection with, or to secure payment of, workmen's compensation, unemployment insurance, old age pensions or other social security obligations; (iii) Liens in respect of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as execution is not levied thereunder or in respect of which the Borrower or such Subsidiary shall at the time in good faith be prosecuting an appeal or proceedings for review and in respect of which a stay of execution shall have been obtained pending such appeal or review; and (iv) Liens in favor of the Administrative Agent for the benefit of the Lenders and the Administrative Agent under the Loan Documents. -32- 6.2.2. Restrictions on Negative Pledges and Upstream Limitations. The --------------------------------------------------------- Borrower will not, nor will it permit any of its Subsidiaries to (a) enter into or permit to exist any arrangement or agreement (excluding the Loan Agreement and the other Loan Documents) which directly or indirectly prohibits the Borrower or any of its Subsidiaries from creating, assuming or incurring any Lien upon its properties, revenues or assets or those of any of its Subsidiaries whether now owned or hereafter acquired, or (b) enter into any agreement, contract or arrangement (excluding the Loan Agreement and the other Loan Documents) restricting the ability of any Subsidiary of the Borrower to pay or make dividends or distributions in cash or kind to the Borrower, to make loans, advances or other payments of whatsoever nature to the Borrower, or to make transfers or distributions of all or any part of its assets to the Borrower; in each case other than customary anti-assignment provisions contained in leases and licensing agreements entered into by the Borrower or such Subsidiary in the ordinary course of its business. 6.3. Restrictions on Investments. The Borrower will not, and will not --------------------------- permit any of its Subsidiaries to, make or permit to exist or to remain outstanding any Investment except: (a) Investments by the Borrower or its Subsidiaries in marketable direct or guaranteed obligations of the United States of America that mature within one (1) year from the date of purchase by the Borrower; (b) Investments by the Borrower or its Subsidiaries in demand deposits, certificates of deposit, Eurodollar deposits, bankers acceptances and time deposits of United States banks having total assets in excess of $1,000,000,000, or foreign subsidiaries of such banks; (c) Investments by the Borrower or its Subsidiaries in securities commonly known as "commercial paper" issued by a corporation organized and existing under the laws of the United States of America or any state thereof that at the time of purchase have been rated and the ratings for which are not less than "P-1" if rated by Moody's, and not less than "A-1" if rated by Standard & Poor's; (d) Investments by the Borrower or its Subsidiaries in debt of any state or political subdivision that is rated "A" or better and due within one (1) year from the date of purchase by the Borrower or its Subsidiaries; (e) Investments by the Borrower or its Subsidiaries in repurchase agreements secured by any one or more of the foregoing; (f) Investments by the Borrower or its Subsidiaries in shares of any so- called "money market fund", provided that such fund is registered under the -------- Investment Company Act of 1940, has net assets of at least $500,000,000 and has an investment portfolio with an average maturity of 365 days or less; (g) Investments by the Borrower or its Subsidiaries in interest rate swaps, caps, collars or similar arrangements entered into in connection with Indebtedness permitted under this Agreement; -33- (h) The FINOVA Loan and any Investment in common stock of FINOVA Group; and (i) Investments of the proceeds of the Funding Fee (as defined in the FINOVA Credit Agreement) paid to the Borrower under the FINOVA Credit Agreement. 6.4. Merger and Consolidation. The Borrower will not, and will not permit ------------------------ any of its Subsidiaries to, become a party to any merger, amalgamation or consolidation, or agree to or effect any asset acquisition or stock acquisition (other than the acquisition of assets in the ordinary course of business consistent with past practices) except the merger or consolidation of one or more of the Subsidiaries of the Borrower with and into the Borrower, or the merger or consolidation of two or more Subsidiaries of the Borrower. 6.5. Sale and Leaseback. The Borrower will not, and will not permit any of ------------------ its Subsidiaries to, enter into any arrangement, directly or indirectly, whereby the Borrower or any Subsidiary of the Borrower shall sell or transfer any property owned by it in order then or thereafter to lease such property or lease other property that the Borrower or any Subsidiary of the Borrower intends to use for substantially the same purpose as the property being sold or transferred. 6.6. Employee Benefit Plans. Neither the Borrower nor any ERISA Affiliate ---------------------- will become a party to or be bound by or subject to any Employee Benefit Plan, Multiemployer Pension Plan or Guaranteed Pension Plan nor will it incur liability under any Employee Benefit Plan, Multiemployer Pension Plan or Guaranteed Pension Plan of any ERISA Affiliate. 6.7. Business Activities. The Borrower will not, and will not permit any ------------------- of its Subsidiaries to, engage directly or indirectly (whether through Subsidiaries or otherwise) in any business activity other than those related to (a) the making of the FINOVA Loan and the holding and voting of the common stock of FINOVA Group, (b) the performance of its obligations under the FINOVA Credit Agreement and activities associated with the administration and monitoring of FINOVA Group and its Subsidiaries in connection therewith, (c) the performance of obligations under the Management Agreement, (d) the holding of Investments permitted by (S)6.3, and (e) the borrowing contemplated by this Loan Agreement. 6.8. Fiscal Year. The Borrower will not, and will not permit any of it ----------- Subsidiaries to, change the date of the end of its fiscal year from that set forth in (S)4.4.1. 6.9. Absence of Financing Statements, etc. Except with respect to ------------------------------------ Permitted Liens and except with respect to UCC financing statements filed to give notice of a true lease, the Borrower shall not permit to exist any financing statement, security agreement, chattel mortgage, real estate mortgage or other document filed or recorded with any filing records, registry or other public office, that purports to cover, affect or give notice of any present or possible future lien on, or security interest in, any assets or property of the Borrower or any of its Subsidiaries or any rights relating thereto. 6.10. FINOVA Loan Documents. In the event that the Borrower is not the --------------------- Controlling Party, no amendment, waiver, supplement, consent or other modification to the FINOVA Loan Documents shall be made by the Borrower without the prior written consent of the Controlling -34- Party. In the event that the Borrower is not the Controlling Party, it agrees that it will execute any amendments, waivers, supplements or consents to the FINOVA Loan Documents as may be deemed necessary by the Controlling Party. 7. CLOSING CONDITIONS. ------------------ The obligations of the Lenders to make the Loan shall be subject to the satisfaction of the following conditions precedent on or prior to August 21, 2001. 7.1. Loan Documents; FINOVA Loan Documents. Each of the Loan Documents ------------------------------------- shall have been duly executed and delivered by the respective parties thereto, shall be in full force and effect and shall be in form and substance satisfactory to each of the Lenders. Each Lender shall have received a fully executed copy of each such document. Each of the FINOVA Loan Documents and the Management Agreement shall have been duly executed and delivered by the respective parties thereto and shall be in full force and effect. The Administrative Agent shall have received a copy of the execution version of each such document. 7.2. Certified Copies of Governing Documents. Each of the Lenders shall --------------------------------------- have received from each Guarantor and the Borrower a copy, certified by a duly authorized officer of such Person to be true and complete on the Closing Date, of each of its Governing Documents as in effect on such date of certification. 7.3. Corporate or Other Action. All corporate (or other) action necessary ------------------------- for the valid execution, delivery and performance by each Guarantor and the Borrower of this Loan Agreement and the other Loan Documents to which it is or is to become a party shall have been duly and effectively taken, and evidence thereof satisfactory to the Lenders shall have been provided to the Administrative Agent. 7.4. Incumbency Certificate. The Administrative Agent shall have received ---------------------- from each Guarantor and the Borrower an incumbency certificate, dated as of the Closing Date, signed by a duly authorized officer of such Person, and giving the name and bearing a specimen signature of each individual who shall be authorized: (a) to sign, in the name and on behalf of each of such Person, each of the Loan Documents to which such Person is or is to become a party; and (b) to give notices and to take other action on its behalf under the Loan Documents. 7.5. UCC Search Results. The Administrative Agent shall have received the ------------------ results of UCC searches in the Borrower's state of organization and principal place of business in form and substance satisfactory to the Administrative Agent. 7.6. Opinion of Counsel. The Administrative Agent shall have received a ------------------ favorable legal opinion addressed to the Lenders and the Administrative Agent, dated as of the Closing Date, in form and substance reasonably satisfactory to the Lenders and the Administrative Agent, from (a) Munger Tolles & Olson LLP, counsel to BH and the Borrower, and (b) Weil, Gotshal & Manges LLP, counsel to LNC and the Borrower. 7.7. Payment of Fees. The Borrower shall have paid to the Lenders, the --------------- Administrative Agent, or the Lead Arranger, as appropriate, the Fees due and payable on the Closing Date. -35- 7.8. No Material Adverse Change. Since the Balance Sheet Date, there shall -------------------------- have occurred no material adverse change in the condition (financial or otherwise), operations, assets, or income of BH or the Borrower and the long term senior unsecured debt rating of BH shall not have been reduced to a level below AA (as rated by Standard & Poor's) or Aa2 (as rated by Moody's). 7.9. Liquidity Provider Agreements. The Administrative Agent shall have ----------------------------- received evidence satisfactory to it of the execution and delivery of the Liquidity Provider Agreements and commitments of the Liquidity Providers thereunder in an aggregate amount at least equal to 102% (or such other amount as is provided in such Liquidity Provider's constituent and operating agreements) of the portion of the Loan to be funded by the issuance of Commercial Paper by the Conduit Lenders, and shall have received an executed copy of each such agreement. 7.10. Final Order. A Final Order shall be in full force and effect for each ----------- Chapter 11 Case. 7.11. Representations True; No Event of Default. Each of the ----------------------------------------- representations and warranties of the Borrower contained in this Loan Agreement, the other Loan Documents or in any document or instrument delivered pursuant to or in connection with this Loan Agreement shall be true in all material respects, and no Default or Event of Default shall have occurred and be continuing. 7.12. No Legal Impediment. No change shall have occurred in any law or ------------------- regulations thereunder or interpretations thereof that in the reasonable opinion of any Lender would make it illegal for such Lender to make the Loan. 7.13. Proceedings and Documents. All proceedings in connection with the ------------------------- transactions contemplated by this Loan Agreement, the other Loan Documents and all other documents incident thereto shall be satisfactory in substance and in form to the Lenders and to the Administrative Agent, the Administrative Agent's Special Counsel and Conduit Counsel, and the Lenders, the Administrative Agent and such counsel shall have received all information and such counterpart originals or certified or other copies of such documents as the Administrative Agent may reasonably request. 8. EVENTS OF DEFAULT; ACCELERATION; ETC. ------------------------------------ 8.1. Events of Default and Acceleration. If any of the following events ---------------------------------- events ("Events of Default" or, if the giving of notice or the lapse of time or ------ -- ------- both is required, then, prior to such notice or lapse of time, "Defaults") shall -------- occur: (a) the Borrower shall fail to pay any principal of the Loan when the same shall become due and payable, whether at the stated date of maturity or any accelerated date of maturity or at any other date fixed for payment; (b) the Borrower shall fail to pay any interest on the Loan, any Fees, or other sums due hereunder or under any of the other Loan Documents, when the same shall become due and payable, whether at the stated date of maturity or any accelerated date -36- of maturity or at any other date fixed for payment and such failure shall continue for five (5) days; (c) the Borrower shall fail to comply with any of its covenants contained in (S)5.5, the first sentence of (S)5.6 or (S)5.10; (d) the Borrower or any of its Subsidiaries shall fail to comply with any of the covenants set forth in (S)5.4 or (S)6 hereof and such failure shall continue for thirty (30) days after the earlier to occur of (i) the Borrower or such Subsidiary becoming aware of such failure or (ii) the Borrower receiving notice of such failure from the Administrative Agent; (e) BH shall at any time have failed to maintain a long term senior unsecured non-credit enhanced debt rating of at least AA, as determined by Standard & Poor's, and Aa2, as determined by Moody's; (f) BH, the Borrower or any of its Subsidiaries shall fail to perform any term, covenant or agreement contained herein or in any of the other Loan Documents (other than those specified elsewhere in this (S)9.1) for thirty (30) days after written notice of such failure has been given, respectively, to BH or the Borrower by the Administrative Agent; (g) The BH Guaranty shall be terminated, cancelled, revoked, repudiated or rescinded; (h) any representation or warranty of BH, the Borrower or any of its Subsidiaries in this Loan Agreement or any of the other Loan Documents or in any other document or instrument delivered pursuant to or in connection with this Loan Agreement shall prove to have been false in any material respect upon the date when made or deemed to have been made or repeated; (i) the Borrower or any of its Subsidiaries shall fail to pay at maturity, or within any applicable period of grace, any obligation for borrowed money or credit received or in respect of any capitalized leases, singly or in the aggregate, in excess of $10,000,000 or fail to observe or perform any material term, covenant or agreement contained in any agreement by which it is bound, evidencing or securing borrowed money or credit received or in respect of any capitalized leases, singly or in the aggregate, in excess of $10,000,000 for such period of time as would permit (assuming the giving of appropriate notice if required) the holder or holders thereof or of any obligations issued thereunder to accelerate the maturity thereof, or any such holder or holders shall rescind or shall have a right to rescind the purchase of any such obligations; (j) FNV Capital shall fail to pay at maturity, or within any applicable period of grace, any obligation when due evidenced by the FINOVA Loan Documents, or shall fail to observe or perform any material term, covenant or agreement contained in any of the FINOVA Loan Documents which has resulted in the holder or holders thereof or of any obligations issued thereunder accelerating the maturity thereof; -37- (k) BH, the Borrower or any of its Subsidiaries or FNV Capital shall make an assignment for the benefit of creditors, or admit in writing its inability to pay or generally fail to pay its debts as they mature or become due, or shall petition or apply for the appointment of a trustee or other custodian, liquidator or receiver of BH, the Borrower or any of its Subsidiaries or FNV Capital or of any substantial part of the assets of BH, the Borrower or any of its Subsidiaries or FNV Capital or shall commence any case or other proceeding relating to BH, the Borrower or any of its Subsidiaries or FNV Capital under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any jurisdiction, now or hereafter in effect, or shall take any action to authorize or in furtherance of any of the foregoing, or if any such petition or application shall be filed or any such case or other proceeding shall be commenced against BH, the Borrower or any of its Subsidiaries or FNV Capital and BH, the Borrower or any of its Subsidiaries or FNV Capital, as applicable, shall indicate its approval thereof, consent thereto or acquiescence therein or such petition or application shall not have been dismissed within forty-five (45) days following the filing thereof; (l) a decree or order is entered appointing any such trustee, custodian, liquidator or receiver or adjudicating BH, the Borrower or any of its Subsidiaries or FNV Capital bankrupt or insolvent, or approving a petition in any such case or other proceeding, or a decree or order for relief is entered in respect of BH, the Borrower or any Subsidiary of the Borrower or FNV Capital in an involuntary case under federal bankruptcy laws as now or hereafter constituted; (m) there shall remain in force, undischarged, unsatisfied and unstayed, for more than thirty days, whether or not consecutive, any final judgment against the Borrower or any of its Subsidiaries that, with other outstanding final judgments undischarged against the Borrower or any of its Subsidiaries, exceeds in the aggregate $50,000,000; (n) if any of the Loan Documents shall be cancelled, terminated, revoked or rescinded otherwise than in accordance with the terms thereof or with the express prior written agreement, consent or approval of the Lenders, or any action at law, suit or in equity or other legal proceeding to cancel, revoke or rescind any of the Loan Documents shall be commenced by or on behalf of BH, LNC or the Borrower, or any court or any other Governmental Authority or agency of competent jurisdiction shall make a determination that, or issue a judgment, order, decree or ruling to the effect that, any one or more of the Loan Documents is illegal, invalid or unenforceable in accordance with the terms thereof; (o) BH and LNC shall at any time, legally and beneficially, own, directly or indirectly, less than one hundred percent (100%) of the membership interests of the Borrower; then, and in any such event, so long as the same may be continuing, the Administrative Agent may, and upon the request of the Required Lenders shall, by notice in writing to the Borrower declare all amounts owing with respect to this Loan Agreement, the Notes and the other Loan Documents to be, and they shall thereupon forthwith become, immediately due and payable -38- without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; provided that in the event of any -------- Event of Default specified in (S)8.1(k) or (S)8.1(l) all such amounts shall become immediately due and payable automatically and without any requirement of notice from the Administrative Agent or any Lender. 8.2. Remedies. In case any one or more of the Events of Default shall have -------- occurred and be continuing, and whether or not the Lenders shall have accelerated the maturity of the Loan pursuant to (S)8.1, each Lender, if owed any amount with respect to the Loan, may, with the consent of the Required Lenders but not otherwise, proceed to protect and enforce its rights by suit in equity, action at law or other appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Loan Agreement and the other Loan Documents or any instrument pursuant to which the Obligations to such Lender are evidenced, including as permitted by applicable law the obtaining of the ex parte appointment of a receiver, and, if such amount shall -- ----- have become due, by declaration or otherwise, proceed to enforce the payment thereof or any other legal or equitable right of such Lender. No remedy herein conferred upon any Lender or the Administrative Agent or the holder of any Note is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or any other provision of law. 8.3. Distribution of Collateral Proceeds. In the event that, following the ----------------------------------- occurrence or during the continuance of any Default or Event of Default, the Administrative Agent or any Lender, as the case may be, receives any monies in connection with the enforcement of any of the Security Documents, or otherwise with respect to the realization upon any of the Collateral, such monies shall be distributed for application as follows: (a) First, to the payment of, or (as the case may be) the reimbursement of the Administrative Agent for or in respect of all reasonable costs, expenses, disbursements and losses which shall have been incurred or sustained by the Administrative Agent in connection with the collection of such monies by the Administrative Agent, for the exercise, protection or enforcement by the Administrative Agent of all or any of the rights, remedies, powers and privileges of the Administrative Agent under this Loan Agreement or any of the other Loan Documents or in respect of the Collateral or in support of any provision of adequate indemnity to the Administrative Agent against any taxes or liens which by law shall have, or may have, priority over the rights of the Administrative Agent to such monies; (b) Second, to all other Obligations in such order or preference as the Required Lenders may determine; provided, however, that (i) -------- ------- distributions shall be made (A) pari passu among Obligations with respect ---- ----- to the Administrative Agent's Fee and all other Obligations and (B) with respect to each type of Obligation owing to the Lenders, such as interest, principal, fees and expenses, among the Lenders pro rata, and (ii) the --- ---- Administrative Agent may in its discretion make proper allowance to take into account any Obligations not then due and payable; (c) Third, upon payment and satisfaction in full or other provisions for payment in full satisfactory to the Lenders and the Administrative Agent of all of the -39- Obligations, to the payment of any obligations required to be paid pursuant to (S)9-608(a)(1)(c) or (S)9-615(a)(3) of the UCC; and (d) Fourth, the excess, if any, shall be returned to the Borrower or to such other Persons as are entitled thereto. 9. THE ADMINISTRATIVE AGENT. ------------------------ 9.1. Authorization. ------------- (a) The Administrative Agent is authorized to take such action on behalf of each of the Lenders and to exercise all such powers as are hereunder and under any of the other Loan Documents and any related documents delegated to the Administrative Agent, together with such powers as are reasonably incident thereto, provided that no duties or -------- responsibilities not expressly assumed herein or therein shall be implied to have been assumed by the Administrative Agent. (b) The relationship between the Administrative Agent and each of the Lenders is that of an independent contractor. The use of the term "Administrative Agent" is for convenience only and is used to describe, as -------------------- a form of convention, the independent contractual relationship between the Administrative Agent and each of the Lenders. Nothing contained in this Loan Agreement nor the other Loan Documents shall be construed to create an agency, trust or other fiduciary relationship between the Administrative Agent and any of the Lenders. (c) As an independent contractor empowered by the Lenders to exercise certain rights and perform certain duties and responsibilities hereunder and under the other Loan Documents, the Administrative Agent is nevertheless a "representative" of the Lenders, as that term is defined in -------------- Article 1 of the UCC, for purposes of actions for the benefit of the Lenders and the Administrative Agent with respect to all collateral security and guaranties contemplated by the Loan Documents. Such actions include the designation of the Administrative Agent as "secured party", ------- ----- "mortgagee" or the like on all financing statements and other documents and --------- instruments, whether recorded or otherwise, relating to the attachment, perfection, priority or enforcement of any security interests, mortgages or deeds of trust in collateral security intended to secure the payment or performance of any of the Obligations, all for the benefit of the Lenders and the Administrative Agent. 9.2. Employees and Agents. The Administrative Agent may exercise its powers -------------------- and execute its duties by or through employees or agents and shall be entitled to take, and to rely on, advice of counsel concerning all matters pertaining to its rights and duties under this Loan Agreement and the other Loan Documents. The Administrative Agent may utilize the services of such Persons as the Administrative Agent in its sole discretion may reasonably determine, and all reasonable fees and expenses of any such Persons shall be paid by the Borrower. 9.3. No Liability. Neither the Administrative Agent nor any of its ------------ shareholders, directors, officers or employees nor any other Person assisting them in their duties nor any agent or employee thereof, shall be liable for any waiver, consent or approval given or any -40- action taken, or omitted to be taken, in good faith by it or them hereunder or under any of the other Loan Documents, or in connection herewith or therewith, or be responsible for the consequences of any oversight or error of judgment whatsoever, except that the Administrative Agent or such other Person, as the case may be, may be liable for losses due to its willful misconduct or gross negligence. 9.4. No Representations. ------------------ 9.4.1. General. The Administrative Agent shall not be responsible for ------- the execution or validity or enforceability of this Loan Agreement, the Notes, any of the other Loan Documents or any instrument at any time constituting, or intended to constitute, collateral security for the Notes, or for the value of any such collateral security or for the validity, enforceability or collectability of any such amounts owing with respect to the Notes, or for any recitals or statements, warranties or representations made herein or in any of the other Loan Documents or in any certificate or instrument hereafter furnished to it by or on behalf of the Borrower or any of its Subsidiaries, or be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or in any instrument at any time constituting, or intended to constitute, collateral security for the Notes or to inspect any of the properties, books or records of the Borrower or any of its Subsidiaries. The Administrative Agent shall not be bound to ascertain whether any notice, consent, waiver or request delivered to it by the Borrower or any holder of any of the Notes shall have been duly authorized or is true, accurate and complete. The Administrative Agent has not made nor does it now make any representations or warranties, express or implied, nor does it assume any liability to the Lenders, with respect to the credit worthiness or financial conditions of the Borrower or any of its Subsidiaries or either Guarantor. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based upon such information and documents as it has deemed appropriate, made its own credit analysis and decision to enter into this Loan Agreement. 9.4.2. Closing Documentation, etc. For purposes of determining -------------------------- compliance with the conditions set forth in (S)7, each Lender that has executed this Loan Agreement shall be deemed to have consented to, approved or accepted, or to be satisfied with, each document and matter either sent, or made available, by the Administrative Agent or the Lead Arranger to such Lender for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to such Lender, unless an officer of the Administrative Agent or the Lead Arranger active upon the Borrower's account shall have received notice from such Lender prior to the Closing Date specifying such Lender's objection thereto and such objection shall not have been withdrawn by notice to the Administrative Agent or the Lead Arranger to such effect on or prior to the Closing Date. 9.5. Payments. -------- 9.5.1. Payments to Administrative Agent. A payment by the Borrower to -------------------------------- the Administrative Agent hereunder or under any of the other Loan Documents for the account of any Lender shall constitute a payment to such Lender. The Administrative -41- Agent agrees promptly to distribute to each Lender such Lender's pro rata --- ---- share of payments received by the Administrative Agent for the account of the Lenders (if such payments are received by 1:00 p.m. (Boston time) on any Business Day, the Administrative Agent will distribute such payments by 3:00 p.m. (Boston time) on the same day) except as otherwise expressly provided herein or in any of the other Loan Documents. 9.5.2. Distribution by Administrative Agent. If in the opinion of the ------------------------------------ Administrative Agent the distribution to the Lenders of any amount received by it in such capacity hereunder, under the Notes or under any of the other Loan Documents might involve it in liability, it may refrain from making distribution until its right to make distribution shall have been adjudicated by a court of competent jurisdiction. If a court of competent jurisdiction shall adjudge that any amount received and distributed by the Administrative Agent is to be repaid, each Person to whom any such distribution shall have been made shall either repay to the Administrative Agent its proportionate share of the amount so adjudged to be repaid or shall pay over the same in such manner and to such Persons as shall be determined by such court. 9.5.3. Delinquent Lenders. Notwithstanding anything to the contrary ------------------ contained in this Loan Agreement or any of the other Loan Documents, any Lender that fails (a) to make available to the Administrative Agent its pro --- rata share of the Loan or (b) to comply with the provisions of (S)10.1 with ---- respect to making dispositions and arrangements with the other Lenders, where such Lender's share of any payment received, whether by setoff or otherwise, is in excess of its pro rata share of such payments due and --- ---- payable to all of the Lenders, in each case as, when and to the full extent required by the provisions of this Loan Agreement, shall be deemed delinquent (a "Delinquent Lender") and shall be deemed a Delinquent Lender ----------------- until such time as such delinquency is satisfied. If any Lender becomes a Delinquent Lender, the Borrower may replace such Delinquent Lender as permitted by (S)3.12 hereof. A Delinquent Lender shall be deemed to have assigned any and all payments due to it from the Borrower, whether on account of the outstanding Loan, interest, fees or otherwise, to the remaining nondelinquent Lenders for application to, and reduction of, their respective pro rata shares of the outstanding Loan. The Delinquent Lender --- ---- hereby authorizes the Administrative Agent to distribute such payments to the nondelinquent Lenders in proportion to their respective pro rata shares --- ---- of the outstanding Loan. A Delinquent Lender shall be deemed to have satisfied in full a delinquency when and if, as a result of application of the assigned payments to the outstanding Loan of the nondelinquent Lenders, the Lenders' respective pro rata shares of the outstanding Loan have --- ---- returned to those in effect immediately prior to such delinquency and without giving effect to the nonpayment causing such delinquency. 9.6. Holders of Notes. The Administrative Agent may deem and treat the ---------------- payee of any Note as the absolute owner or purchaser thereof for all purposes hereof until it shall have been furnished in writing with a different name by such payee or by a subsequent holder, assignee or transferee. -42- 9.7. Indemnity. The Lenders ratably agree hereby to indemnify and hold --------- harmless the Administrative Agent and its affiliates from and against any and all claims, actions and suits (whether groundless or otherwise), losses, damages, costs, expenses (including any expenses for which the Administrative Agent or such affiliate has not been reimbursed by the Borrower as required by (S)11.2), and liabilities of every nature and character arising out of or related to this Loan Agreement, the Notes, or any of the other Loan Documents or the transactions contemplated or evidenced hereby or thereby, or the Administrative Agent's actions taken hereunder or thereunder, except to the extent that any of the same shall be directly caused by the Administrative Agent's willful misconduct or gross negligence. Notwithstanding the foregoing, no Conduit Lender shall be liable to pay any amounts hereunder unless it has received funds which may be used to make such payment and not required to repay Commercial Paper issued by it when due. 9.8. Administrative Agent as Lender. In the event that Fleet Securities, ------------------------------ Inc., in its individual capacity, becomes a Lender hereunder, it shall have the same obligations and the same rights, powers and privileges in respect to its Commitment and the portion of the Loan made by it, and as the holder of any of the Notes, as it would have were it not also the Administrative Agent. 9.9. Resignation. The Administrative Agent may resign at any time by ----------- giving sixty (60) days prior written notice thereof to the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent. Unless a Default or Event of Default shall have occurred and be continuing, such successor Administrative Agent shall be reasonably acceptable to the Borrower. If no successor Administrative Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent's giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be a financial institution having a rating of not less than A or its equivalent by Standard & Poor's and not less than A2 or its equivalent by Moody's. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent's resignation, the provisions of this Loan Agreement and the other Loan Documents shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent. 9.10. Notification of Defaults and Events of Default. Each Lender hereby ---------------------------------------------- agrees that, upon learning of the existence of a Default or an Event of Default, it shall promptly notify the Administrative Agent thereof. The Administrative Agent hereby agrees that upon receipt of any notice under this (S)9.10 it shall promptly notify the other Lenders of the existence of such Default or Event of Default. 10. ASSIGNMENT AND PARTICIPATION. ---------------------------- 10.1. Conditions to Assignment by Lenders. Except as provided herein, each ----------------------------------- Lender may assign to one or more commercial banks, other financial institutions or other Persons, all or -43- a portion of its interests, rights and obligations under this Loan Agreement (including all or a portion of the Loan at the time owing to it and the Notes held by it); provided that (a) each of the Administrative Agent and, unless a -------- Default or Event of Default shall have occurred and be continuing, the Borrower shall have given its prior written consent to such assignment, which consent, in the case of the Administrative Agent or Borrower, will not be unreasonably withheld or delayed; except that the consent of the Borrower or the Administrative Agent shall not be required in connection with any assignment by a Lender to (i) an existing Lender or (ii) a Lender Affiliate of such Lender, (b) each assignment (or, in the case of assignments by a Lender to its Lender Affiliates, the aggregate holdings of such Lender and its Lender Affiliates after giving effect to such assignments), shall be in a minimum amount of $10,000,000, (c) each assignee which is a Conduit Lender is a Qualified Conduit Lender, (d) the parties to such assignment shall execute and deliver to the Administrative Agent, for recording in the Register an Assignment and Acceptance, substantially in the form of Exhibit B hereto (an "Assignment and ------- - Acceptance"), together with any Notes subject to such assignment and (e) each assignee is able to and does comply with the provisions of (S)3.3.3 to the extent applicable to such assignee. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be at least five (5) Business Days after the execution thereof, (y) the assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder, and (z) the assigning Lender shall, to the extent provided in such assignment and upon payment to the Administrative Agent of the registration fee referred to in (S)10.3, be released from its obligations under this Loan Agreement. Additionally, each Conduit Lender may assign its interests, rights and obligations hereunder (including its portion of the Loan and Note) to its Liquidity Provider pursuant to the applicable Liquidity Provider Agreement without the consent of any Person. 10.2. Certain Representations and Warranties; Limitations; Covenants. By -------------------------------------------------------------- executing and delivering an Assignment and Acceptance, the parties to the assignment thereunder confirm to and agree with each other and the other parties hereto as follows: (a) other than the representation and warranty that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim, the assigning Lender makes no representation or warranty, express or implied, and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Loan Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Loan Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or the attachment, perfection or priority of any security interest or mortgage, (b) the assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower and its Subsidiaries or any other Person primarily or secondarily liable in respect of any of the Obligations, or the performance or observance by the Borrower and its Subsidiaries or any other Person primarily or secondarily liable in respect of any of the Obligations of any of their obligations under this Loan Agreement or any of the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; -44- (c) such assignee confirms that it has received a copy of this Loan Agreement, together with copies of the most recent financial statements referred to in (S)4.4 or (S)5.4 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (d) such assignee will, independently and without reliance upon the assigning Lender, the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Loan Agreement; (e) such assignee appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Loan Agreement and the other Loan Documents as are delegated to the Administrative Agent by the terms hereof or thereof, together with such powers as are reasonably incidental thereto; (f) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Loan Agreement are required to be performed by it as a Lender; (g) such assignee represents and warrants that it is legally authorized to enter into such Assignment and Acceptance; and (i) such assignee acknowledges that it has complied with the provisions of (S)3.3.3 to the extent applicable. 10.3. Register. The Administrative Agent shall maintain a copy of each -------- Assignment and Acceptance delivered to it and a register or similar list (the "Register") for the recordation of the names and addresses of the Lenders and -------- the Commitment Percentage of, and principal amount of the Loan owing to the Lenders from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Loan Agreement. The Register shall be available for inspection by the Borrower and the Lenders at any reasonable time and from time to time upon reasonable prior notice. Upon each such recordation, the assigning Lender agrees to pay to the Administrative Agent a registration fee in the sum of $2,500, provided, however, that in the case of an assignment -------- ------- by a Lender to a Lender Affiliate or an assignment by a Conduit Lender to its Liquidity Provider, the payment of a registration fee shall not be required. 10.4. New Notes. Upon its receipt of an Assignment and Acceptance executed --------- by the parties to such assignment, together with each Note subject to such assignment, the Administrative Agent shall (a) record the information contained therein in the Register, and (b) give prompt notice thereof to the Borrower and the Lenders (other than the assigning Lender). Within five (5) Business Days after receipt of such notice, the Borrower, at its own expense, shall execute and deliver to the Administrative Agent, in exchange for each surrendered Note, a new Note to the order of such Assignee in an amount equal to the amount assumed by such Assignee pursuant to such Assignment and Acceptance and, if the assigning Lender has -45- retained some portion of its obligations hereunder, a new Note to the order of the assigning Lender in an amount equal to the amount retained by it hereunder. Such new Notes shall provide that they are replacements for the surrendered Notes, shall be in an aggregate principal amount equal to the aggregate principal amount of the surrendered Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of the assigned Notes. 10.5. Participations. Each Lender may sell participations to one or more -------------- Lenders or other entities in all or a portion of such Lender's rights and obligations under this Loan Agreement and the other Loan Documents; provided -------- that (a) each such participation shall be in an amount of not less than $10,000,000, (b) any such sale or participation shall not affect the rights and duties of the selling Lender hereunder to the Borrower (c) such participant is able to and does comply with the requirements of (S)3.3.3 to the extent applicable and (d) the only rights granted to the participant pursuant to such participation arrangements with respect to waivers, amendments or modifications of the Loan Documents shall be the rights to approve waivers, amendments or modifications that would reduce the principal of or the interest rate on the Loan, extend the term or increase the amount of the Commitment of such Lender as it relates to such participant, reduce the amount of any Facility Fee to which such participant is entitled or extend any regularly scheduled payment date for principal or interest. 10.6. Assignee or Participant Affiliated with the Borrower. If any ---------------------------------------------------- assignee Lender is an Affiliate of the Borrower, then any such assignee Lender shall have no right to vote as a Lender hereunder or under any of the other Loan Documents for purposes of granting consents or waivers or for purposes of agreeing to amendments or other modifications to any of the Loan Documents or for purposes of making requests to the Administrative Agent pursuant to (S)11.1 or (S)11.2, and the determination of the Required Lenders shall for all purposes of this Loan Agreement and the other Loan Documents be made without regard to such assignee Lender's interest in the Loan. If any Lender sells a participating interest in the Loan to a participant, and such participant is the Borrower or an Affiliate of the Borrower, then such transferor Lender shall promptly notify the Administrative Agent of the sale of such participation. A transferor Lender shall have no right to vote as a Lender hereunder or under any of the other Loan Documents for purposes of granting consents or waivers or for purposes of agreeing to amendments or modifications to any of the Loan Documents or for purposes of making requests to the Administrative Agent pursuant to (S)11.1 or (S)11.2 to the extent that such participation is beneficially owned by the Borrower or any Affiliate of the Borrower, and the determination of the Required Lenders shall for all purposes of this Loan Agreement and the other Loan Documents be made without regard to the interest of such transferor Lender in the Loan. The provisions of this (S)10.6 shall not apply to an assignee Lender or participant which is also a Lender on the Closing Date or to an assignee Lender or participant which has disclosed to the other Lenders that it is an Affiliate of the Borrower and which, following such disclosure, has been excepted from the provisions of this (S)10.6 in a writing signed by the Required Lenders determined without regard to the interest of such assignee Lender or transferor Lender, to the extent of such participation, in the Loan. 10.7. Miscellaneous Assignment Provisions. Any assigning Lender shall ----------------------------------- retain its rights to be indemnified pursuant to (S)11.3 with respect to any claims or actions arising prior to the date of such assignment. Anything contained in this (S)10 to the contrary notwithstanding, -46- any Lender may at any time pledge or assign a security interest in all or any portion of its interest and rights under this Loan Agreement (including all or any portion of its Notes) to secure obligations of such Lender, including any pledge or assignment to secure obligations (a) to any of the twelve Federal Reserve Banks organized under (S)4 of the Federal Reserve Act, 12 U.S.C. (S)341 and (b) with respect to any Lender that is a fund that invests in bank loans, to any lender or any trustee for, or any other representative of, holders of obligations owed or securities issued by such fund as security for such obligations or securities or any institutional custodian for such fund or for such lender. Any foreclosure or similar action by any Person in respect of such pledge or assignment shall be subject to the other provisions of this (S)10. No such pledge or the enforcement thereof shall release the pledgor Lender from its obligations hereunder or under any of the other Loan Documents, provide any voting rights hereunder to the pledgee thereof, or affect any rights or obligations of the Borrower or Administrative Agent hereunder. 10.8. Assignment by Borrower. Except to the extent provided in this ---------------------- (S)10.8, the Borrower shall not assign or transfer any of its rights or obligations under any of the Loan Documents without the prior written consent of each of the Lenders. Notwithstanding the foregoing, so long as no Default or Event of Default then exists or would result after giving effect thereto, the Borrower may transfer all of its rights and obligations hereunder to an Affiliate which (a) is an entity complying with the provisions of (S)6.7 hereof, (b) is wholly owned (directly or indirectly) by BH and LNC, and (c) has been assigned (and has assumed) all rights and obligations of the Borrower under the FINOVA Loan Documents, provided, that (i) such Affiliate has expressly assumed -------- all of the Borrower's obligations under the Loan Documents pursuant to documentation acceptable to the Administrative Agent and the Required Lenders, (ii) such Affiliate has delivered to the Administrative Agent documents satisfying the requirements of (S)(S)7.2 through 7.6 hereof with respect to such Affiliate and (iii) each of BH and LNC has expressly affirmed in writing its continuing Guaranty of the Obligations. 11. PROVISIONS OF GENERAL APPLICATIONS. ---------------------------------- 11.1. Setoff. The Borrower hereby grants to the Administrative Agent and ------ each of the Lenders a continuing lien, security interest and right of setoff as security for all liabilities and obligations to the Administrative Agent and each Lender, whether now existing or hereafter arising, upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of the Administrative Agent or such Lender or any Lender Affiliate and their successors and assigns or in transit to any of them. Regardless of the adequacy of any collateral, if any of the Obligations are due and payable and have not been paid or any Event of Default shall have occurred, any deposits or other sums credited by or due from any of the Lenders to the Borrower and any securities or other property of the Borrower in the possession of such Lender may be applied to or set off by such Lender against the payment of Obligations and any and all other liabilities, direct, or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, of the Borrower to such Lender. ANY AND ALL RIGHTS TO REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. Each of the Lenders agrees with each other -47- Lender that (a) if an amount to be set off is to be applied to Indebtedness of the Borrower to such Lender, other than Indebtedness evidenced by the Notes held by such Lender, such amount shall be applied ratably to such other Indebtedness and to the Indebtedness evidenced by all such Notes held by such Lender, and (b) if such Lender shall receive from the Borrower, whether by voluntary payment, exercise of the right of setoff, counterclaim, cross action, enforcement of the claim evidenced by the Notes held by such Lender by proceedings against the Borrower at law or in equity or by proof thereof in bankruptcy, reorganization, liquidation, receivership or similar proceedings, or otherwise, and shall retain and apply to the payment of the Note or Notes held by such Lender any amount in excess of its ratable portion of the payments received by all of the Lenders with respect to the Notes held by all of the Lenders, such Lender will make such disposition and arrangements with the other Lenders with respect to such excess, either by way of distribution, pro tanto assignment of claims, subrogation or --- ----- otherwise as shall result in each Lender receiving in respect of the Notes held by it, its proportionate payment as contemplated by this Loan Agreement; provided that if all or any part of such excess payment is thereafter recovered - -------- from such Lender, such disposition and arrangements shall be rescinded and the amount restored to the extent of such recovery, but without interest. Each party hereto hereby agrees that, prior to the date that is one year and one day after the later of (i) the payment in full of all outstanding Obligations owed to any Conduit Lender and (ii) the Maturity Date, it will not institute against, or join any other Person in instituting against such Conduit Lender, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States of America or any state thereof. 11.2. Expenses. The Borrower agrees to pay (a) the reasonable costs of the -------- Administrative Agent producing and reproducing this Loan Agreement, the other Loan Documents and the other agreements and instruments mentioned herein, (b) any taxes (including any interest and penalties in respect thereto) payable by the Administrative Agent or any of the Lenders (other than taxes based upon the Administrative Agent's or any Lender's net income) on or with respect to the transactions contemplated by this Loan Agreement (the Borrower hereby agreeing to indemnify the Administrative Agent and each Lender with respect thereto), (c) the reasonable fees, expenses and disbursements of the Administrative Agent's Special Counsel, Conduit Counsel or any local counsel to the Administrative Agent incurred in connection with the preparation, administration or interpretation of the Loan Documents and other instruments mentioned herein, each closing hereunder, any amendments, modifications, approvals, consents or waivers hereto or hereunder, or the cancellation of any Loan Document upon payment in full in cash of all of the Obligations or pursuant to any terms of such Loan Document providing for such cancellation, (d) the fees, expenses and disbursements of the Administrative Agent or any of its affiliates incurred by the Administrative Agent or such affiliate in connection with the preparation, administration or interpretation of the Loan Documents and other instruments mentioned herein, including all appraisal and examination charges, (e) all reasonable out-of-pocket expenses (including without limitation reasonable attorneys' fees and costs, which attorneys may be employees of any Lender or the Administrative Agent, and reasonable consulting, accounting, appraisal, investment banking and similar professional fees and charges) incurred by any Lender or the Administrative Agent in connection with (i) the enforcement of or preservation of rights under any of the Loan Documents against the Borrower or any of its Subsidiaries or the administration thereof after the occurrence of a Default or Event of Default and (ii) any litigation, proceeding or dispute -48- whether arising hereunder or otherwise, in any way related to any Lender's or the Administrative Agent's relationship with the Borrower or any of its Subsidiaries and (f) all reasonable fees, expenses and disbursements of any Lender or the Administrative Agent incurred in connection with UCC searches. The covenants contained in this (S)11.2 shall survive payment or satisfaction in full of all other obligations. 11.3. Indemnification. The Borrower agrees to indemnify and hold harmless --------------- the Administrative Agent, its affiliates and the Lenders from and against any and all claims, actions and suits whether groundless or otherwise, and from and against any and all liabilities, losses, damages and expenses of every nature and character arising out of this Loan Agreement or any of the other Loan Documents or the transactions contemplated hereby including, without limitation, (a) any actual or proposed use by the Borrower or any of its Subsidiaries of the proceeds of the Loan, or (b) the Guarantors, the Borrower or any of its Subsidiaries entering into or performing this Loan Agreement or any of the other Loan Documents in each case including, without limitation, the reasonable fees and disbursements of counsel and allocated costs of internal counsel incurred in connection with any such investigation, litigation or other proceeding. In litigation, or the preparation therefor, the Lenders and the Administrative Agent and its affiliates shall be entitled to select their own counsel and, in addition to the foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees and expenses of such counsel. If, and to the extent that the obligations of the Borrower under this (S)11.3 are unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the payment in satisfaction of such obligations which is permissible under applicable law. The covenants contained in this (S)11.3 shall survive payment or satisfaction in full of all other Obligations. 11.4. Treatment of Certain Confidential Information. --------------------------------------------- 11.4.1. Confidentiality. Each of the Lenders and the Administrative --------------- Agent agrees, on behalf of itself and each of its affiliates, directors, officers, employees and representatives, to use reasonable precautions to keep confidential any non-public information supplied to it by the Borrower or any of its Subsidiaries or either Guarantor pursuant to this Loan Agreement or any other Loan Document that is identified by such Person to such Lender as being confidential at the time the same is delivered to the Lenders or the Administrative Agent, provided that nothing herein shall -------- limit the disclosure of any such information (a) after such information shall have become public other than through a violation of this (S)11.4, or becomes available to any of the Lenders or the Administrative Agent on a nonconfidential basis from a source other than the Borrower, (b) to the extent required by statute, rule, regulation or judicial process, (c) to counsel, auditors or accountants for any of the Lenders or the Administrative Agent, or to Liquidity Providers or rating agencies, (d) to bank examiners or any other regulatory authority having jurisdiction over any Lender or the Administrative Agent, (e) to the Administrative Agent, any Lender or any Financial Affiliate, (f) in connection with any litigation to which any one or more of the Lenders, the Administrative Agent or any Financial Affiliate is a party, or in connection with the enforcement of rights or remedies hereunder or under any other Loan Document, (g) to a Lender Affiliate or a Subsidiary or affiliate of the Administrative Agent, (h) to any actual or prospective assignee or participant or any actual or prospective counterparty (or its advisors) to any swap or -49- derivative transactions referenced to credit or other risks or events arising under this Loan Agreement or any other Loan Document so long as such assignee, participant or counterparty, as the case may be, agrees to be bound by the provisions of (S)11.4 or (i) with the consent of the Borrower. 11.4.2. Prior Notification. Unless specifically prohibited by ------------------ applicable law or court order, each of the Lenders and the Administrative Agent shall, prior to disclosure thereof, notify the Borrower of any request for disclosure of any such non-public information by any governmental agency or representative thereof (other than any such request in connection with an examination of the financial condition of such Lender by such governmental agency) or pursuant to legal process. 11.4.3. Other. In no event shall any Lender or the Administrative ----- Agent be obligated or required to return any materials furnished to it or any Financial Affiliate by the Borrower or any of its Subsidiaries. The obligations of each Lender under this (S)11.4 shall supersede and replace the obligations of such Lender under any confidentiality letter in respect of this financing signed and delivered by such Lender to the Borrower prior to the date hereof and shall be binding upon any assignee of, or purchaser of any participation in, any interest in any of the Loans from any Lender. 11.5. Survival of Covenants, Etc. All covenants and agreements, made -------------------------- herein, in the Notes or in any of the other Loan Documents shall be deemed to have been relied upon by the Lenders and the Administrative Agent, notwithstanding any investigation heretofore or hereafter made by any of them, and shall survive the making by the Lenders of the Loan and shall continue in full force and effect so long as any amount due under this Loan Agreement or the Notes or any of the other Loan Documents remains outstanding, and for such further time as may be otherwise expressly specified in this Agreement. 11.6. Notices. Except as otherwise expressly provided in this Loan ------- Agreement, all notices and other communications made or required to be given pursuant to this Loan Agreement or the Notes shall be in writing and shall be delivered by hand, mailed by United States registered or certified first class mail, postage prepaid, sent by overnight courier, or sent by facsimile and confirmed by delivery via courier or postal service, addressed as follows: (a) if to the Borrower, at 1440 Kiewit Plaza, Omaha, Nebraska 68131, Attention: Mr. Marc Hamburg, Facsimile: 402-346-3375, with a copy to LNC at 315 Park Avenue South, New York, New York 10010, Attention: President, Facsimile: 212-598-4869, or at such other address for notice as the Borrower shall last have furnished in writing to the Person giving the notice; (b) if to the Administrative Agent, at 100 Federal Street, Boston, Massachusetts 02110, USA, Attention: John P. O'Loughlin, Facsimile: 617- 434-1574 and Thomas Marra, Facsimile: 617-434-5719, or at such other address for notice as the Administrative Agent shall last have furnished in writing to the Person giving the notice; and -50- (c) if to any Lender, at such Lender's address set forth on Schedule 1 ---------- hereto, or such other address for notice as such Lender shall have last furnished in writing to the Person giving the notice. Any such notice or demand shall be deemed to have been duly given or made and to have become effective (i) if delivered by hand, overnight courier or facsimile to a responsible officer of the party to which it is directed, at the time of the receipt thereof by such officer or the sending of such facsimile and (ii) if sent by registered or certified first-class mail, postage prepaid, on the third Business Day following the mailing thereof. Any notice or other communication to be made hereunder or under the Notes, even if otherwise required to be in writing under other provisions of this Loan Agreement or the Notes, may alternatively be made in an electronic record transmitted electronically under such authentication and other procedures as the parties hereto may from time to time agree in writing (but not an electronic record), and such electronic transmission shall be effective at the time set forth in such procedures. Unless otherwise expressly provided in such procedures, such an electronic record shall be equivalent to a writing under the other provisions of this Loan Agreement or the Notes, and such authentication, if made in compliance with the procedures so agreed by the parties hereto in writing (but not an electronic record), shall be equivalent to a signature under the other provisions of this Loan Agreement or the Notes. 11.7. Governing Law. THIS LOAN AGREEMENT AND, EXCEPT AS OTHERWISE ------------- SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS LOAN AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN (S)11.6. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT. 11.8. Headings. The captions in this Loan Agreement are for convenience of -------- reference only and shall not define or limit the provisions hereof. 11.9. Counterparts. This Loan Agreement and any amendment hereof may be ------------ executed in several counterparts and by each party on a separate counterpart, each of which when executed and delivered shall be an original, and all of which together shall constitute one instrument. In proving this Loan Agreement it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought. Delivery by facsimile by any of the parties hereto of an executed counterpart hereof or of any amendment or waiver hereto shall be as effective as an original executed counterpart hereof or of such amendment or waiver and shall be considered a representation that an original executed counterpart hereof or such amendment or waiver, as the case may be, will be delivered. -51- 11.10. Entire Agreement, Etc. The Loan Documents and any other documents --------------------- executed in connection herewith or therewith express the entire understanding of the parties with respect to the transactions contemplated hereby. Neither this Loan Agreement nor any term hereof may be changed, waived, discharged or terminated, except as provided in (S)11.12. 11.11. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES -------------------- ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS LOAN AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS AND AGREES THAT IT WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. Except as prohibited by law, the Borrower hereby waives any right it may have to claim or recover in any litigation referred to in the preceding sentence any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages. The Borrower (a) certifies that no representative, agent or attorney of any Lender or the Administrative Agent has represented, expressly or otherwise, that such Lender or the Administrative Agent would not, in the event of litigation, seek to enforce the foregoing waivers and (b) acknowledges that the Administrative Agent and the Lenders have been induced to enter into this Loan Agreement and the other Loan Documents to which they are parties by, among other things, the waivers and certifications contained herein. 11.12. Consents, Amendments, Waivers, Etc. Any consent or approval ---------------------------------- required or permitted by this Loan Agreement to be given by the Lenders may be given, and any term of this Loan Agreement, the other Loan Documents or any other instrument related hereto or mentioned herein may be amended, and the performance or observance by the Borrower or any of its Subsidiaries of any terms of this Loan Agreement, the other Loan Documents or such other instrument or the continuance of any Default or Event of Default may be waived (either generally or in a particular instance and either retroactively or prospectively) with, but only with, the written consent of the Borrower and the written consent of the Required Lenders. Notwithstanding the foregoing, no amendment, modification or waiver shall: (a) without the written consent of the Borrower and each Lender directly affected thereby: (i) reduce or forgive the principal amount of the Loan, or reduce the rate of interest on the Notes or the amount of the Facility Fee; (ii) increase the amount of such Lender's Commitment or extend the expiration date of such Lender's Commitment; (iii) postpone or extend the Maturity Date or any other regularly scheduled dates for payments of principal of, or interest on, the Loan or any Fees -52- or other amounts payable to such Lender or modify any of the provisions relating to amounts, timing or application of prepayments of the Loan and other Obligations, including under (S)2.4.2 (it being understood that any vote to rescind any acceleration made pursuant to (S)8.1 of amounts owing with respect to the Loan and other Obligations shall require only the approval of the Required Lenders); and (iv) other than pursuant to a transaction permitted by the terms of this Loan Agreement, release the security interest in the Berkadia Note or release either Guarantor from its guaranty obligations under the Guaranties (excluding, if the Borrower or any Subsidiary of a Borrower becomes a debtor under the federal Bankruptcy Code, the release of "cash collateral", as defined in Section 363(a) of the federal Bankruptcy Code pursuant to a cash collateral stipulation with the debtor approved by the Required Lenders); (b) without the written consent of all of the Lenders, amend or waive this (S)11.12, (S)8.3 or the definition of Required Lenders; (c) without the written consent of the Administrative Agent, amend or waive (S)9, the amount or time of payment of the Administrative Agent's Fee payable for the Administrative Agent's account or any other provision applicable to the Administrative Agent. No waiver shall extend to or affect any obligation not expressly waived or impair any right consequent thereon. No course of dealing or delay or omission on the part of the Administrative Agent or any Lender in exercising any right shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon the Borrower shall entitle the Borrower to other or further notice or demand in similar or other circumstances. The Administrative Agent will notify the rating agencies of material consents, waivers and amendments hereunder. 11.13. Severability. The provisions of this Loan Agreement are severable ------------ and if any one clause or provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction, and shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision of this Loan Agreement in any jurisdiction. IN WITNESS WHEREOF, the undersigned have duly executed this Loan Agreement as a sealed instrument as of the date first set forth above. BERKADIA LLC By: BERKADIA MANAGEMENT, LLC, its Manager By: /s/ Marc D. Hamburg -------------------------------- Name: Marc D. Hamburg Title: President FLEET SECURITIES, INC., as Administrative Agent By: /s/ Robert D. Valbona ------------------------------ Name: Robert D. Valbona Title: Director EAGLEFUNDING CAPITAL CORP. By: /s/ John T. Hackett III ------------------------------------ Name: John T. Hackett Title: Director LONG LANE MASTER TRUST IV By: Fleet National Bank as Trust Administrator By: /s/ Renee Nadler ------------------------------------------- Name: Renee Nadler Title: Managing Director PARADIGM FUNDING LLC By: /s/ Evelyn Echevarria -------------------------------- Name: Evelyn Echevarria Title: Vice President COMPASS US ACQUISITION, LLC By: /s/ Douglas K. Johnson ------------------------------ Name: Douglas K. Johnson Title: President FOUR WINDS FUNDING CORPORATION By: Commerzbank Aktiengesellschaft, New York By: /s/ Carl H. Jackson ------------------------------------ Name: Carl H. Jackson Title: Senior Vice President By: /s/ M. Annette Hanami ------------------------------------ Name: M. Annette Hanami Title: Vice President SHEFFIELD RECEIVABLES CORPORATION By: /s/ Janette Lieu ------------------------------ Name: Janette Lieu Title: Associate Director JUPITER SECURITIZATION CORPORATION By: /s/ Edwin J. Resinger -------------------------------- Name: Edwin J. Resinger Title: Authorized Signatory AUTOBAHN FUNDING COMPANY LLC By: DG Bank Deutsche Genossenschaftsbank AG, As its Attorney-in-Fact By: /s/ Kenneth Bradt ------------------------------------ Name: Kenneth Bradt Title: Senior Vice President By: /s/ Richard J. Wisniewski ------------------------------------ Name: Richard J. Wisniewski Title: Vice President ASSET SECURITIZATION COOPERATIVE CORP. By: /s/ John P. Gevlin ---------------------------------- Name: John P. Gevlin Title: Vice President & Chief Financial Officer OLD LINE FUNDING CORP. By: Royal Bank of Canada, as Attorney-in-Fact By: /s/ Lorna P. Mendelson -------------------------------------- Name: Lorna P. Mendelson Title: Manager By: /s/ Dina Capeci -------------------------------------- Name: Dina Capeci Title: Manager MONTE ROSA CAPITAL CORPORATION By: ING Baring (U.S.) Capital Markets LLC, as Attorney-in-Fact By: /s/ Joe Weingarten --------------------------- Name: Joe Weingarten Title: Managing Director SANPAOLO IMI S.P.A By: /s/ Barbara Bassi ----------------------------------- Name: Barbara Bassi Title: V.P. By: /s/ Carlo Persico ----------------------------------- Name: Carlo Persico Title: G.M. LIBERTY STREET FUNDING CORP. By: /s/ Andrew L. Stidd --------------------------------- Name: Andrew L. Stidd Title: President NORTH COAST FUNDING LLC By: /s/ Peter C. Rogers --------------------------------- Name: Peter C. Rogers Title: Directors BLACK FOREST FUNDING CORPORATION By: /s/ Andy Yan ------------------------------- Name: Andy Yan Title: Vice President BAVARIA UNIVERSAL FUNDING CORP. By: /s/ Andy Yan ----------------------------- Name: Andy Yan Title: Vice President BLUE RIDGE ASSET FUNDING CORPORATION By: Wachovia Bank, N.A. Its Attorney in fact By: /s/ Victoria A. Dudley -------------------------------------- Name: Victoria A. Dudley Title: Managing Director MANHATTAN ASSET FUNDING COMPANY LLC By: MAF Receivables Corp., its Member By: /s/ Dwight Jenkins -------------------------------- Name: Dwight Jenkins Title: Vice President THREE PILLARS FUNDING CORP. By: /s/ Evelyn Echevarria ------------------------------------ Name: Evelyn Echevarria Title: Vice President By: Sun Trust Capital Markets, Inc. Its Administrator By: /s/ James R. Bennison ------------------------------------ Name: James R. Bennison Title: Managing Director GIRO MULTI-FUNDING CORPORATION By: /s/ David O. Taylor ------------------------------------ Name: David O. Taylor Title: Vice President EX-4 5 dex4.txt LEUCADIA NATIONAL CORPORATION GUARANTY Exhibit 4 LEUCADIA NATIONAL CORPORATION 315 Park Avenue South New York, New York 10010 Telephone 212-460-1900 GUARANTY TO: FLEET SECURITIES, INC., AS ADMINISTRATIVE AGENT AND THE LENDERS FROM TIME TO TIME PARTY TO THE LOAN AGREEMENT (AS DEFINED BELOW): LEUCADIA NATIONAL CORPORATION, of 315 Park Avenue South, New York, New York, 10010, incorporated under the laws of the State of New York (hereinafter referred to as the "Guarantor"), in order to induce the Lenders and the Administrative Agent under that certain Loan Agreement dated as of August 21, 2001 (as amended, restated or modified from time to time, the "Loan Agreement") and the related Loan Documents, by and among BERKADIA LLC (the "Borrower"), the Lenders from time to time party thereto (the "Lenders") and FLEET SECURITIES, INC. as administrative agent for the Lenders (the "Administrative Agent"), to make the Loans evidenced by the Loan Agreement and the Notes to the Borrower, does hereby guarantee irrevocably and unconditionally the punctual payment and performance of the Obligations, and not only of their collectability, to the Lenders and the Administrative Agent, as applicable, together with all interest and other charges and reasonable expenses attributable thereto and all reasonable expenses incurred by the Lenders and the Administrative Agent, in enforcing their rights under this Guaranty. Should the Borrower default in the payment or performance of any of the Obligations as and when they become due in accordance with the terms of the Loan Agreement and the other Loan Documents, the Administrative Agent shall provide five (5) Business Days' prior written notice to the Guarantor at the above address (or at such other address for notice as the Guarantor shall last have furnished in writing to the Administrative Agent) and to Berkshire Hathaway Inc. ("BH") that the obligations of the Guarantor hereunder and of BH under the BH Guaranty, in respect of such payment or performance shall become immediately due and payable as of the date stated in such notice (a "Payment Demand"). Notwithstanding the foregoing, the Guarantor's liability in respect of each Payment Demand hereunder shall be limited to an amount equal to ten percent (10%) of such Payment Demand. Payments by the Guarantor may be required hereunder on any number of occasions, and shall be made to the Administrative Agent in accordance with the relevant Payment Demand. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement. The liability of the Guarantor under this Guaranty shall be unconditional irrespective of (i) any lack of enforceability of any Obligation, (ii) any change of the time, manner or place of payment, or any other term of any Obligation, (iii) any exchange, release, impairment or non-perfection of any collateral securing payment of any Obligation, (iv) any law, regulation or order of any jurisdiction affecting any term of any Obligation or the Lenders' or the Administrative Agent's rights with respect thereto, and (v) any other circumstance which might otherwise constitute a defense available to, or a discharge of, the Borrower or a guarantor other than the irrevocable payment and satisfaction in full in cash of all of the Obligations. The Guarantor waives promptness, diligence, presentment, demand, protest, notice of acceptance and all other notices with respect to any Obligation and this Guaranty, all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any requirement that the Administrative Agent or any Lender exhaust any right or take any action against the Borrower or any collateral security, and all suretyship defenses generally. This is a continuing guaranty and shall remain in full force and effect until the irrevocable payment and satisfaction in full in cash of all of the Obligations. This Guaranty shall continue to be effective or be reinstated, notwithstanding the foregoing, if at any time a court of proper jurisdiction orders any payment made with respect to any Obligation to be returned to the Borrower by the Administrative Agent or any Lender upon the insolvency, bankruptcy or reorganization of the Borrower or FNV Capital, or otherwise, all as though such payment had not been made or received. Until the irrevocable payment and satisfaction in full in cash of all of the Obligations, the Guarantor (a) shall not exercise any rights against the Borrower arising as a result of payment by the Guarantor hereunder, by way of subrogation, reimbursement, restitution or contribution, (b) will assign to the Lenders the proceeds of any claim in respect of any payment hereunder in any bankruptcy, insolvency or reorganization case or proceedings of any nature in which the Borrower is the debtor, and (c) will not claim any setoff, recoupment or counterclaim against the Borrower for any payment made hereunder in respect of any liability of the Guarantor to the Borrower. The Guarantor hereby makes the representations and warranties set forth on Exhibit A hereto as of the Closing Date. - ------- - The Guarantor will promptly notify the Administrative Agent in writing of any event or occurrence with respect to it which could reasonably be expected to have a Material Adverse Effect. The Administrative Agent's books and records shall be prima facie evidence ----- ----- (absent manifest error) of any claim the Lenders and the Administrative Agent may make under this Guaranty. This Guaranty shall be binding upon the Guarantor and its successors and shall inure to the benefit of the Administrative Agent and the Lenders and their respective successors, transferees and assigns. The Guarantor may not assign any of its obligations hereunder. This Guaranty shall be governed by and construed in accordance with the laws of State of New York. The Guarantor agrees that any suit for the enforcement of this Guaranty may be brought in the courts of the State of New York or any federal court sitting therein and consents to the nonexclusive jurisdiction of such court and service of process in any such suit being made upon the Guarantor by mail at the address set forth in this Guaranty. IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed as of the 21st day of August, 2001. LEUCADIA NATIONAL CORPORATION By: /s/ JOSEPH A. ORLANDO ______________________________ Name: Joseph A. Orlando Title: Authorized Officer Acknowledged and Agreed: FLEET SECURITIES, INC., as Administrative Agent By: /s/ ROBERT D. VALBONA _____________________________ Name: Robert D. Valbona Title: Director EXHIBIT A TO GUARANTY Capitalized terms used herein without definition shall have the definitions given to such terms in the Guaranty or the Loan Agreement. 1. Corporate Authority. ------------------- 1.1 Incorporation; Good Standing. The Guarantor (a) is a corporation ---------------------------- duly organized, validly existing and in good standing under the laws of New York, (b) has all requisite corporate power to own its material property and conduct its business as now conducted and as presently contemplated, and (c) is in good standing as a foreign corporation and is duly authorized to do business in each jurisdiction where such qualification is necessary except where a failure to be so qualified would not have a Material Adverse Effect. 1.2 Authorization. The execution, delivery and performance of the ------------- Guaranty and the transactions contemplated thereby (a) are within the corporate authority of the Guarantor, (b) have been duly authorized by all necessary corporate proceedings, (c) do not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which the Guarantor is subject or any judgment, order, writ, injunction, license or permit applicable to the Guarantor except such as would not have a Material Adverse Effect, and (d) do not conflict with any provision of the Governing Documents of, or any agreement or other instrument binding upon, the Guarantor. 1.3 Enforceability. The execution and delivery of the Guaranty will -------------- result in valid and legally binding obligations of the Guarantor enforceable against it in accordance with the terms and provisions thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors' rights and except to the extent that the availability of certain equitable remedies is subject to the discretion of the court before which any proceeding therefor may be brought. 2. Governmental Approvals. The execution, delivery and performance by the ---------------------- Guarantor of the Guaranty and the transactions contemplated thereby do not require the approval or consent of, or filing with, any governmental agency or authority other than those (a) already obtained, and (b) the failure to obtain which would not have, with respect to it, a Material Adverse Effect. 3. Financial Statements. There has been furnished to each of the Lenders a -------------------- consolidated balance sheet of the Guarantor as at the Balance Sheet Date, and the consolidated statement of income and consolidated statement of cash flow of the Guarantor for the fiscal year then ended, certified by PricewaterhouseCoopers. Such balance sheet, statement of income and statement of cash flow have been prepared in accordance with generally accepted accounting principles and fairly present the consolidated financial condition of the Guarantor as at such date and the results of operations for the fiscal year then ended. There were no contingent liabilities of the Guarantor as of such date involving material amounts, known to the officers of the Guarantor, which were required by GAAP to be disclosed in such balance sheets and/or the notes related thereto which were not so disclosed. 4. No Material Changes, etc. Since the Balance Sheet Date, there has been ------------------------ no event or occurrence with respect to it which has had a Material Adverse Effect. EX-5 6 dex5.txt BERKSHIRE HATHAWAY INC. GUARANTY Exhibit 5 BERKSHIRE HATHAWAY INC. 1440 Kiewit Plaza Omaha, Nebraska 68131 Telephone (402) 346-1400 GUARANTY TO: FLEET SECURITIES, INC., AS ADMINISTRATIVE AGENT AND THE LENDERS FROM TIME TO TIME PARTY TO THE LOAN AGREEMENT (AS DEFINED BELOW): BERKSHIRE HATHAWAY INC., of 1440 Kiewit Plaza, Omaha, Nebraska 68131, incorporated under the laws of Delaware (hereinafter referred to as the "Guarantor"), in order to induce the Lenders and the Administrative Agent under that certain Loan Agreement dated as of August 21, 2001 (as amended, restated or modified from time to time, the "Loan Agreement") and the related Loan Documents, by and among BERKADIA LLC (the "Borrower"), the Lenders from time to time party thereto (the "Lenders") and FLEET SECURITIES, INC., as administrative agent for the Lenders (the "Administrative Agent"), to make the Loans evidenced by the Loan Agreement and the Notes to the Borrower, does hereby guarantee irrevocably and unconditionally the punctual payment and performance of the Obligations, and not only of their collectability, to the Lenders and the Administrative Agent, as applicable, together with all interest and other charges and reasonable expenses attributable thereto and all reasonable expenses incurred by the Lenders and the Administrative Agent, in enforcing their rights under this Guaranty. Should the Borrower default in the payment or performance of any of the Obligations as and when they become due in accordance with the terms of the Loan Agreement and the other Loan Documents, the Administrative Agent shall provide five (5) Business Days' prior written notice (the "Notice Period") to the Guarantor at the above address (or such other address for notice as the Guarantor shall have last furnished in writing to the Administrative Agent) and to Leucadia National Corporation ("LNC") that the obligations of the Guarantor hereunder and of LNC under the LNC Guaranty, in respect of such payment or performance shall become immediately due and payable as of the date stated in such notice (a "Payment Demand"). Notwithstanding the foregoing, the obligations of the Guarantor hereunder in respect of an amount equal to ten percent (10%) of any Payment Demand shall only become due and payable if, upon the expiration of the Notice Period, LNC has failed to satisfy its obligations under the LNC Guaranty. Payments by the Guarantor may be required hereunder on any number of occasions, and shall be made to the Administrative Agent in accordance with the relevant Payment Demand. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement. The liability of the Guarantor under this Guaranty shall be unconditional irrespective of (i) any lack of enforceability of any Obligation, (ii) any change of the time, manner or place of payment, or any other term of any Obligation, (iii) any exchange, release, impairment or non-perfection of any collateral securing payment of any Obligation, (iv) any law, regulation or order of any jurisdiction affecting any term of any Obligation or the Lenders' or the Administrative Agent's rights with respect thereto, and (v) any other circumstance which might otherwise -2- constitute a defense available to, or a discharge of, the Borrower or a guarantor other than the irrevocable payment and satisfaction in full in cash of all of the Obligations. The Guarantor waives promptness, diligence, presentment, demand, protest, notice of acceptance and all other notices with respect to any Obligation and this Guaranty, all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any requirement that the Administrative Agent or any Lender exhaust any right or take any action against the Borrower or any collateral security, and all suretyship defenses generally. This is a continuing guaranty and shall remain in full force and effect until the irrevocable payment and satisfaction in full in cash of all of the Obligations. This Guaranty shall continue to be effective or be reinstated, notwithstanding the foregoing, if at any time a court of proper jurisdiction orders any payment made with respect to any Obligation to be returned to the Borrower or LNC by the Administrative Agent or any Lender upon the insolvency, bankruptcy or reorganization of the Borrower, LNC or FNV Capital, or otherwise, all as though such payment had not been made or received. Until the irrevocable payment and satisfaction in full in cash of all of the Obligations, the Guarantor (a) shall not exercise any rights against the Borrower arising as a result of payment by the Guarantor hereunder, by way of subrogation, reimbursement, restitution or contribution, (b) will assign to the Lenders the proceeds of any claim in respect of any payment hereunder in any bankruptcy, insolvency, or reorganization case or proceedings of any nature in which the Borrower is the debtor, and (c) will not claim any setoff, recoupment or counterclaim against the Borrower for any payment made hereunder in respect of any liability of the Guarantor to the Borrower. The Guarantor hereby makes the representations and warranties set forth on Exhibit A hereto as of the Chasing Date. - ------- - The Guarantor hereby covenants and agrees that, so long as this Guaranty remains in full force and effect, it will deliver the following to the Administrative Agent if it has not filed the following with the Securities and Exchange Commission by the respective dates stated below: (a) as soon as practicable, but in any event not later than ninety- five (95) days after the end of each fiscal year of the Guarantor, the consolidated balance sheet of the Guarantor, as at the end of such year, and the related consolidated statement of income and consolidated statement of cash flow for such year, prepared in accordance with GAAP, and certified without qualification by Deloitte & Touche LLP or other internationally recognized ("Big 5") certified public accountants. (b) as soon as practicable, but in any event not later than fifty (50) days after the end of each of the first three fiscal quarters of the Guarantor, copies of the unaudited consolidated balance sheet of the Guarantor as at the end of such quarter, and the related consolidated statement of income and consolidated statement of cash flow for the portion of such fiscal year then elapsed, prepared in accordance with GAAP. -3- The Guarantor will promptly notify the Administrative Agent in writing of any event or occurrence with respect to it which could reasonably be expected to have a Material Adverse Effect. The Administrative Agent's books and records shall be prima facie evidence ----- ----- (absent manifest error) of any claim the Lenders and the Administrative Agent may make under this Guaranty. This Guaranty shall be binding upon the Guarantor and its successors and shall inure to the benefit of the Administrative Agent and the Lenders and their respective successors, transferees and assigns. The Guarantor may not assign any of its obligations hereunder. This Guaranty shall be governed by and construed in accordance with the laws of State of New York. The Guarantor agrees that any suit for the enforcement of this Guaranty may be brought in the courts of the State of New York or any federal court sitting therein and consents to the nonexclusive jurisdiction of such court and service of process in any such suit being made upon the Guarantor by mail at the address set forth in this Guaranty. IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed as of the 21st day of August, 2001. BERKSHIRE HATHAWAY INC. By: /S/ MARC D. HAMBURG ____________________________________ Name: Marc D. Hamburg Title: Vice President Acknowledged and Agreed: FLEET SECURITIES, INC. as Administrative Agent By: /s/ ROBERT D. VALBONA _______________________ Name: Robert D. Valbona Title: Director EXHIBIT A TO GUARANTY Capitalized terms used herein without definition shall have the definitions given to such terms in the Guaranty or the Loan Agreement. 1. Corporate Authority. ------------------- 1.1 Incorporation; Good Standing. The Guarantor (a) is a corporation ---------------------------- duly organized, validly existing and in good standing under the laws of Delaware, (b) has all requisite corporate power to own its material property and conduct its business as now conducted and as presently contemplated, and (c) is in good standing as a foreign corporation and is duly authorized to do business in each jurisdiction where such qualification is necessary except where a failure to be so qualified would not have a Material Adverse Effect. 1.2 Authorization. The execution, delivery and performance of the ------------- Guaranty and the transactions contemplated thereby (a) are within the corporate authority of the Guarantor, (b) have been duly authorized by all necessary corporate proceedings, (c) do not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which the Guarantor is subject or any judgment, order, writ, injunction, license or permit applicable to the Guarantor except such as would not have a Material Adverse Effect, and (d) do not conflict with any provision of the Governing Documents of, or any agreement or other instrument binding upon, the Guarantor. 1.3 Enforceability. The execution and delivery of the Guaranty will -------------- result in valid and legally binding obligations of the Guarantor enforceable against it in accordance with the terms and provisions thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors' rights and except to the extent that the availability of certain equitable remedies is subject to the discretion of the court before which any proceeding therefor may be brought. 2. Governmental Approvals. The execution, delivery and performance by the ---------------------- Guarantor of the Guaranty and the transactions contemplated thereby do not require the approval or consent of, or filing with, any governmental agency or authority other than those (a) already obtained and (b) the failure to obtain which would not have, with respect to it, a Material Adverse Effect. 3. Financial Statements. There has been furnished to each of the Lenders -------------------- a consolidated balance sheet of the Guarantor as at the Balance Sheet Date, and the consolidated statement of income and consolidated statement of cash flow of the Guarantor for the fiscal year then ended, certified by Deloitte & Touche LLP. Such balance sheet, statement of income and statement of cash flow have been prepared in accordance with generally accepted accounting principles and fairly present the consolidated financial condition of the Guarantor as at such date and the results of operations for the fiscal year then ended. There were no contingent liabilities of the Guarantor as of such date involving material amounts, known to the officers of the Guarantor, which were required by GAAP to be disclosed in such balance sheets and/or the notes related thereto which were not so disclosed. -2- 4. No Material Changes, etc. Since the Balance Sheet Date, there has been ------------------------ no event or occurrence with respect to it which has had a Material Adverse Effect. EX-8 7 dex8.txt BERKADIA MANAGEMENT LLC OPERATING AGREEMENT Exhibit 8 - -------------------------------------------------------------------------------- BERKADIA MANAGEMENT LLC, a Delaware Limited Liability Company OPERATING AGREEMENT August 21, 2001 - -------------------------------------------------------------------------------- OPERATING AGREEMENT OF BERKADIA MANAGEMENT LLC This OPERATING AGREEMENT is entered into and shall be effective as of the 21st day of August, 2001, by and between BH Finance LLC, a Nebraska limited liability company ("BH Finance"), and WMAC Investment Corporation, a Wisconsin ---------- corporation ("WMAC"), as the sole Members of the Company. ---- RECITALS A. Immediately prior to the date hereof, BH Finance and WMAC were the sole members of Berkadia LLC, a Delaware limited liability company ("Berkadia"). -------- B. In order to consolidate management of the affairs of Berkadia through a single entity (i) concurrently herewith (A) BH Finance is contributing a portion of its interest in Berkadia to BHF Berkadia Member Inc., a Delaware corporation ("B-Sub"), and (B) WMAC is contributing a portion of its interest in Berkadia to ----- WMAC Investors, Inc., a Delaware corporation ("L-Sub"), (ii) each of BH Finance ----- and WMAC is simultaneously contributing the remainder of its interest in Berkadia to the Company, and (iii) Berkadia's operating agreement is being amended to provide for, among other things, the admission of the Company as Berkadia's manager (in such capacity, "Berkadia Manager"). ---------------- C. The parties now desire to set forth an operating agreement for the Company to govern such matters as are set forth herein, all on the terms and conditions set forth below. SECTION 1 THE COMPANY 1.1 Formation. --------- The Company has been formed as a limited liability company under and pursuant to the provisions of the Act and upon the terms and conditions set forth in this Agreement. The rights and liabilities of the Members shall be as provided under the Act, the Certificate (as defined herein) and this Agreement. 1.2 Name. ---- The name of the Company shall be "Berkadia Management LLC" and all business of the Company shall be conducted in such name or such other name as is agreed by the Members. 1.3 Purpose; Powers. --------------- The purposes of the Company are: (a) to hold a membership interest in Berkadia; (b) to act as Berkadia Manager, including, without limitation, to control and manage the business and affairs of Berkadia as contemplated by the Berkadia Operating Agreement; (c) to make such additional investments and engage in such additional activities as the Members may approve; and (d) to engage in any and all activities related or incidental to the foregoing purposes. (The activities described in clauses (a) through (d) above shall be referred to as the "Business.") -------- The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or in furtherance of such purposes. 1.4 Principal Place of Business. --------------------------- The principal place of business of the Company shall be at 1440 Kiewit Plaza, Omaha, Nebraska 68131 or such other location within or without the State of Delaware as the Members may agree. 1.5 Term. ---- The term of the Company commenced on the date the certificate of formation of the Company (as such certificate may be amended, modified, supplemented or restated from time to time, the "Certificate") was filed in the office of the ----------- Secretary of State of the State of Delaware in accordance with the Act and shall continue until the winding up and liquidation of the Company pursuant to Section 10 hereof. 1.6 Filings; Agent for Service of Process. ------------------------------------- (a) The Members have caused the Certificate to be filed in the office of the Secretary of State of the State of Delaware in accordance with the Act. The Members shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware, including the preparation and filing of such amendments to the Certificate and such other assumed name certificates, documents, instruments and publications as may be required by law. (b) The Members shall execute and cause to be filed original or amended certificates and shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any other jurisdictions in which the Company engages in business. (c) As of the Effective Date, the name and address of the Company's designated agent and registered office for service of process on the Company in the State of 2 Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808. 1.7 Definitions. ----------- (a) Capitalized words and phrases used in this Agreement have the following meanings: "Act" means the Delaware Limited Liability Company Act, 6 Del. C. (S)18- 101, et seq., as amended from time to time (or any corresponding provisions of ------- succeeding law). "Additional Capital Contributions" means, with respect to each Member, the Capital Contributions, if any, made by such Member pursuant to Section 2.4 hereof. "Adjusted Capital Account Deficit" means, with respect to any Member, the deficit balance, if any, in such Member's Capital Account as of the end of the relevant Allocation Year, after giving effect to the following adjustments: (i) Credit to such Capital Account any amounts which such Member is deemed to be obligated to restore pursuant to Section 1.704-1(b)(2)(ii)(c) or the penultimate sentences in Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and (ii) Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704- - - - - 1(b)(2)(ii)(d)(6) of the Regulations. - - The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations - and shall be interpreted consistently therewith. "Affiliate" means, with respect to any Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person. "Affiliated Member" has the meaning set forth in Section 9.2 of this Agreement. "Agreement" means this Operating Agreement of Berkadia Management LLC, including any appendix attached hereto, as amended from time to time. Words such as "herein," "hereinafter," "hereof," "hereto" and "hereunder" refer to this Agreement as a whole, unless the context otherwise requires. "Allocation Year" means (i) the period that commenced on the Effective Date and ends on December 31, 2001, (ii) any subsequent twelve (12) month period commencing on January 1 and ending on December 31 or (iii) any portion of the period described in clauses (i) or (ii) for which the Company is required to allocate Profits, Losses and other items of Company income, gain, loss or deduction pursuant to Section 3 hereof and Appendix B hereto. "Available Cash" means the amount of cash that the Members deem available for distribution, taking into account all debts, liabilities, and obligations of the Company then due or soon to come due, including, without limitation, payments of capital contributions required to be 3 made under the Berkadia Operating Agreement and working capital and other amounts and reserves that the Members deem necessary or advisable in connection with the operation of the Company's Business and the payment of capital contributions required to be made under the Berkadia Operating Agreement; provided, however, that Available Cash shall be determined without regard to the - -------- ------- Finova Fees or the Stock Proceeds. "Berkadia" has the meaning set forth in the Recitals to this Agreement. "Berkadia Manager" has the meaning set forth in the Recitals to this Agreement. "Berkadia Operating Agreement" means the First Amended and Restated Operating Agreement of Berkadia, being entered into concurrently herewith, as such agreement may be amended from time to time. "BH Finance" has the meaning set forth in the Recitals to this Agreement. "B-Sub" has the meaning set forth in the Recitals to this Agreement. "Capital Account" means, with respect to any Member, the Capital Account maintained for such Member in accordance with the following provisions: (i) To each Member's Capital Account there shall be credited (A) such Member's Capital Contributions actually (or deemed) made, (B) such Member's distributive share of Profits and any items in the nature of income or gain which are specially allocated pursuant to Section 3 hereof or Paragraph 1, 2 or 3 of Appendix B hereto, and (C) the amount of any Company liabilities assumed by such Member or which are secured by any property distributed to such Member; (ii) To each Member's Capital Account there shall be debited (A) the amount of money and the Gross Asset Value of any property distributed (or deemed distributed) to such Member pursuant to Section 2.3(e), 4, 5.4 or 10 hereof, (B) such Member's distributive share of Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 3 hereof or Paragraph 1, 2 or 3 of Appendix B hereto, and (C) the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company; and (iii) In the event an Interest is Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the Interest. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations. "Capital Contributions" means, with respect to any Member, the amount of money and the initial Gross Asset Value of any property (other than money) contributed or required to be contributed to the Company by such Member pursuant to Section 2, Section 10.2 or Section 12.2 hereof, including Required Capital Contributions and Additional Capital Contributions. 4 "Certificate" has the meaning set forth in Section 1.5 of this Agreement. "Certificate of Cancellation" means a certificate filed in accordance with Section 18-203 of the Act. "Code" means the United States Internal Revenue Code of 1986, as amended from time to time. "Commitment" has the meaning given such term in the Berkadia Operating Agreement. "Company" means the limited liability company formed pursuant to the Certificate and continued pursuant to this Agreement. "Company Minimum Gain" has the same meaning as the term "partnership minimum gain" in Section 1.704-2(b)(2) and 1.704-2(d) of the Regulations. "Covered Losses" means all losses, liabilities, expenses or damages (including reasonable attorneys' fees and expenses) paid to any Third Party Claimant for claims or legal actions arising out of the Senior Loan or the Management Agreement or the performance of responsibilities, or taking of actions or decisions pursuant to either, but shall not include claims or actions to collect or enforce the Outside Financing or any other contractual obligation of the Company. "Debt Percentage" means, with respect to any Member, such Member's Debt Percentage as set forth in Appendix A hereto. "Depreciation" means, for each Allocation Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Allocation Year, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Allocation Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Allocation Year bears to such beginning adjusted tax basis; provided, -------- however, that if the adjusted basis for federal income tax purposes of an asset - ------- at the beginning of such Allocation Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Members. "Effective Date" means the date hereof. "FCC" means Finova Capital Corporation. "Fee Percentage" means, with respect to any Member, such Member's Fee Percentage as set forth in Appendix A hereto. "Finova Fees" means the amounts, if any, received by the Company under Section 4.1(a) of the Berkadia Operating Agreement, as well as any amounts derived by the Company therefrom. 5 "Fiscal Year" means (i) the period commencing on the Effective Date and ending on December 31, 2001, (ii) any subsequent twelve-month period commencing on January 1 and ending on December 31 and (iii) the period commencing on the immediately preceding January 1 and ending on the date on which all property is distributed to the Members pursuant to Section 10 hereof. "FNV" means The Finova Group Inc. "FNV Stock" has the meaning set forth in Section 11.5 of this Agreement. "Gross Asset Value" means with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (i) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset at the time of contribution, as determined by the Members; (ii) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values (taking Code Section 7701(g) into account), as determined by the Members as of the following times: (A) the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution; (B) the ---------- distribution by the Company to a Member of more than a de minimis amount of ---------- Company property as consideration for an interest in the Company; and (C) the liquidation of the Company within the meaning of Regulations Section 1.704- 1(b)(2)(ii)(g); provided that an adjustment at the times described in clauses -------- (A) and (B) of this paragraph shall be made only if the Members determine that such adjustment is necessary to reflect the relative economic interests of the Members in the Company; (iii) The Gross Asset Value of any item of Company assets distributed to any Member shall be adjusted to equal the gross fair market value (taking Code Section 7701(g) into account) of such asset on the date of distribution as determined by the Members; and (iv) The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of - the definition of "Profits" and "Losses" or Paragraph 1(g) of Appendix B hereto; provided, however, that Gross Asset Values shall not be adjusted pursuant to - -------- ------- this subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (ii) or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing Profits and Losses. 6 "Gross Profit" shall mean the sum of (a) the amounts distributed to a Member pursuant to Section 4.1 or Section 10.2 of this Agreement, (b) in the case of WMAC, the fees paid to WMAC or any of its Affiliates pursuant to the Management Agreement (net of amounts, if any, paid over to BH Finance pursuant to Section 11.1 hereof), and (c) in the case of BH Finance, the amounts, if any, paid over to it pursuant to Section 11.1 hereof, in each case, from the Effective Date to the date of the Covered Loss. "Interest" means an ownership interest in the Company, including any and all benefits to which the holder of such Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. "Losses" has the meaning set forth in the definition of "Profits" and "Losses." "L-Sub" has the meaning set forth in the Recitals to this Agreement. "Management Agreement" means that certain Second Amended and Restated Management Services Agreement by and among the Original Leucadia Member, Leucadia International Corporation and FNV, dated as of June 10, 2001 (and prior to June 10, 2001, the predecessor Management Services Agreement dated February 26, 2001, and the First Amended and Restated Management Services Agreement dated April 3, 2001), or any similar agreement. "Member" means any Person (i) who is referred to as such on Appendix A hereto, or who has become a substituted Member pursuant to the terms of this Agreement and (ii) who has not ceased to be a Member. "Member Nonrecourse Debt" has the same meaning as the term "partner nonrecourse debt" in Section 1.704-2(b)(4) of the Regulations. "Member Nonrecourse Debt Minimum Gain" means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of the Regulations. "Member Nonrecourse Deductions" has the same meaning as the term "partner nonrecourse deductions" in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations. "Nonrecourse Deductions" has the meaning set forth in Section 1.704-2(b)(1) of the Regulations. "Nonrecourse Liability" has the meaning set forth in Section 1.704-2(b)(3) of the Regulations. "Original Berkshire Member" means Berkshire Hathaway Inc., a Delaware corporation. "Original Leucadia Member" means Leucadia National Corporation, a New York corporation. 7 "Outside Financing" has the meaning given such term in the Berkadia Operating Agreement. "Outside Financing Documents" has the meaning given such term in the Berkadia Operating Agreement. "Person" means any individual, partnership (whether general or limited), limited liability company, corporation, trust, estate, association, nominee or other entity. "Profits" and "Losses" mean, for each Allocation Year, an amount equal to the Company's taxable income or loss for such Allocation Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication): (i) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of "Profits" and "Losses" shall be added to such taxable income or loss; (ii) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition of "Profits" and "Losses" shall be subtracted from such taxable income or loss; (iii) In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; (iv) Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value; (v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Allocation Year, computed in accordance with the definition of Depreciation; (vi) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in - - determining Capital Accounts as a result of a distribution other than in liquidation of a Member's Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the 8 adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; and (vii) Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 3.1(a) hereof or Paragraph 1, 2 or 3 of Appendix B hereto shall not be taken into account in computing Profits or Losses. The amounts of the items of Company income, gain, loss or deduction available to be specially allocated pursuant to Section 3.1(a) hereof and Paragraphs 1, 2 and 3 of Appendix B hereto shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above. "Proportionate Share" for any Member shall mean the product of (x) the quotient obtained by dividing (I) the Gross Profit of such Member by (II) the aggregate Gross Profit of both Members multiplied by (y) the amount of the Covered Loss. "Regulations" means the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations are amended from time to time. "Required Capital Contributions" means, with respect to each Member, the Capital Contributions, if any, made or required to be made by such Member pursuant to Section 2.3 or 12.2 hereof. "Senior Loan" has the meaning given such term in the Berkadia Operating Agreement. "Senior Loan Documents" has the meaning given such term in the Berkadia Operating Agreement. "Senior Loan Shortfall Amount" means the excess, if any, of the outstanding balance of the Senior Loan over the greater of (i) the Senior Loan's Code Section 704(b) "book" value on the books of the holder (or, if different, the holder's adjusted basis in the Senior Loan for federal income tax purposes) or (ii) the proceeds received by the holder upon a disposition of the Senior Loan in liquidation. "Stock Percentage" means, with respect to any Member, such Member's Stock Percentage as set forth in Appendix A hereto. "Stock Proceeds" means the amounts, if any, received by the Company under Section 4.1(b) of the Berkadia Operating Agreement, as well as any amounts derived by the Company therefrom. "Third Party Claimant" means a person or entity other than the Company, a Member, Berkadia, FCC, FNV, any lender or other party to any of the Outside Financing Documents, or any Affiliate of any of the foregoing; provided, -------- however, that a Third Party Claimant shall include the shareholders or - ------- debtholders of FNV (other than a Member or an Affiliate of a Member) whether making a claim directly or in a derivative form of action. 9 "Transfer" means, as a noun, any voluntary or involuntary transfer, sale, pledge or hypothecation or other disposition and, as a verb, voluntarily or involuntarily to transfer, sell, pledge or hypothecate or otherwise dispose of. "WMAC" has the meaning set forth in the Recitals to this Agreement. SECTION 2 FINANCING; CAPITAL CONTRIBUTIONS 2.1 Initial Capital Contributions. ----------------------------- Concurrently herewith, each Member shall contribute to the Company, as its initial Capital Contribution, (i) 100 percent of its rights with respect to the Funding Fee defined in Annex I to the Commitment, and (ii) 60 percent of all of its right, title and interest in and to its remaining membership interest in Berkadia immediately prior to the date hereof. 2.2 Outside Financing; Guarantees. ----------------------------- (a) Except as otherwise agreed by the Members, the Company, in its capacity as Berkadia Manager, shall cause the final terms of the Outside Financing to include (i) a primary guarantee by the Original Berkshire Member of 90 percent of Berkadia's obligations under such Outside Financing, and (ii) a primary guarantee by the Original Leucadia Member of the remaining 10 percent of Berkadia's obligations under such Outside Financing, as well as a secondary guarantee by the Original Berkshire Member of such remaining 10 percent of Berkadia's obligations under such Outside Financing, in the case of each of clause (i) and (ii), on standard terms and conditions. (b) All other matters relating to the Outside Financing, including, without limitation, the timing, terms and conditions thereof, as well as whether to cause Berkadia to consummate the Outside Financing and all matters related to the administration of the Outside Financing, shall be determined by BH Finance after consultation with WMAC. 2.3 Required Capital Contributions. ------------------------------ (a) If the Company, in its capacity as a member of Berkadia, is required to fund any capital contributions to Berkadia pursuant to Section 2.3(a) of the Berkadia Operating Agreement (relating to the funding of amounts pursuant to the terms of the Commitment), then on or before the date that such contributions are required to be made, the Members shall fund to the Company, pro rata in accordance with their Debt Percentages, an amount of Capital Contributions sufficient to satisfy the Company's obligations to Berkadia. If Outside Financing is not obtained by Berkadia in full, and WMAC elects to seek financing to fund any or all of its Required Capital Contribution under this Section 2.3(a) attributable to such shortfall, then WMAC shall not be required to fund such Required Capital Contribution unless the Original Berkshire Member agrees to provide to the lender or lenders to WMAC a primary guarantee of WMAC's payment obligations under such financing, on standard terms and conditions, limited to the amount of such Required Capital Contribution. (b) If the Company, in its capacity as a member of Berkadia, is required to fund any capital contributions to Berkadia pursuant to Section 2.3(b) of the Berkadia Operating 10 Agreement (relating to payments under the Outside Financing, including payments of principal, interest or similar items under the Outside Financing, or any indemnification obligations of Berkadia under the Outside Financing Documents), and the Company does not have sufficient funds to make such contribution (apart from Finova Fees, Stock Proceeds or the FNV Stock), then on or before the date such funds are required to be contributed, the Members shall fund to the Company, pro rata in accordance with their Debt Percentages, an amount of Capital Contributions that is sufficient to pay the amounts required to be contributed (without drawing upon such Finova Fees, Stock Proceeds or FNV Stock, which assets shall not be applied by the Company to satisfy such Company contributions, and shall retain their status as such items for all purposes of this Agreement, including for purposes of applying Section 4.1 hereof). Consistent with the preceding sentence, and pursuant to Section 18-303(b) of the Act, BH Finance hereby agrees to be liable for 90 percent of the Company's obligations under such Section 2.3(b) and WMAC hereby agrees to be liable for 10 percent of the Company's obligations under such Section 2.3(b). (c) If the Company incurs costs or expenses, other than those set forth in Section 2.3(a) or (b) above, and does not have sufficient funds to pay such expenses (apart from Finova Fees, Stock Proceeds or the FNV Stock), upon demand by the Company or by either Member, the Members shall promptly make Capital Contributions sufficient to pay such costs and expenses (without drawing upon such Finova Fees, Stock Proceeds or FNV Stock, which assets shall not be applied by the Company to satisfy such Company expenses, and shall retain their status as such items for all purposes of this Agreement, including for purposes of applying Section 4.1 hereof) in accordance with the following: (i) With respect to costs and expenses incurred in the operation of the Company's Business from the Effective Date through the date of, and after giving effect to, the funding of the Senior Loan, the Members shall make such Capital Contributions in accordance with their Fee Percentages; provided, however, that with respect to any origination, commitment or similar - -------- ------- up-front fees payable in connection with the Outside Financing, the Members shall make such Capital Contributions in accordance with their Debt Percentages; (ii) with respect to costs and expenses incurred in the operation of the Company's Business following the date of, and after giving effect to, the funding of the Senior Loan, the Members shall make such Capital Contributions in accordance with their Debt Percentages; provided, however, that the Members shall make such Capital Contributions in accordance with their Stock Percentages with respect to costs and expenses attributable (directly or indirectly) to Berkadia's ownership of the FNV Stock; and (iii) notwithstanding (i) and (ii) above, Section 12.2 shall control Capital Contributions required to fund costs and expenses that constitute Covered Losses. (d) the Original Berkshire Member agrees to contribute (or cause to be contributed) to BH Finance, and the Original Leucadia Member agrees to contribute (or cause to be contributed) to WMAC, an amount sufficient for such Member to fund its Required Capital Contributions as and when required under this Section 2.3. 11 (e) If a Member (the "defaulting Member") fails to fund its Required Capital Contributions as and when required, whether pursuant to this Section 2.3, Section 12.2, or otherwise, the non-defaulting Member shall have a direct claim against the defaulting Member for breach of contract hereunder, and the non-defaulting Member and the Company (at the sole direction of the non- defaulting Member) shall have all remedies available to either of them in law or equity with respect to such failure by the defaulting Member. Without limiting the foregoing, (i) interest shall accrue on a defaulting Member's unfunded Capital Contributions from the date required to be made at a per annum rate equal to the "prime rate" (as specified in the Wall Street Journal or similar national publication) plus two percentage points ("prime plus two"), compounded annually, (ii) the non-defaulting Member shall be entitled to contribute to the Company the amount of such unfunded Capital Contributions, and (iii) to the extent the non-defaulting Member has funded in place of the defaulting Member, amounts otherwise distributable to the defaulting Member under this Agreement, whether pursuant to Section 4.1, upon liquidation of the Company pursuant to Section 10.2, or otherwise, shall be distributed by the Company to the non- defaulting Member, but deemed for all purposes of this Agreement as distributed to the defaulting Member and immediately recontributed to the Company as Required Capital Contributions, until such time as the non-defaulting Member has received from the Company on account of such distributions a return of the amount, if any, funded in place of the defaulting Member, plus interest thereon from the date funded at prime plus two, compounded annually. To the extent the non-defaulting Member has not funded in place of the defaulting Member, amounts otherwise distributable to the defaulting Member shall be retained by the Company, but deemed for all purposes of this Agreement as distributed to the defaulting Member and immediately recontributed to the Company as Required Capital Contributions, until such time as the Company has retained an amount of such distributions equal to the amount not funded by the defaulting Member (or by the non-defaulting Member pursuant to the immediately preceding sentence), plus interest thereon from the date required to be made at prime plus two, compounded annually. A defaulting Member shall remain in default hereunder until it has contributed, or is deemed to have contributed, to the Company, all amounts required to be contributed under this Section 2.3(e), including interest. Beginning on the date that is 10 days after the receipt of written notice from the Company or the non-defaulting Member that the recipient Member is in default hereunder, the defaulting Member shall not have any voting, consent or appointment rights as a Member, or any other rights to direct the Company in any manner, during the continuation of such default. 2.4 Additional Capital Contributions. -------------------------------- The Members may make additional Capital Contributions (in addition to those required by Section 2.3 hereof) with the written consent of all Members, in which event the Company shall adjust the Members' Debt Percentages, Fee Percentages and/or Stock Percentages in the manner unanimously agreed by the Members. SECTION 3 ALLOCATIONS 3.1 Profits and Losses. ------------------ (a) After giving effect to the special allocations set forth in Paragraphs 1, 2 and 3 of Appendix B hereto (i) income constituting original issue discount with respect to the 12 Senior Loan for any Allocation Year shall be allocated 50 percent to each Member and (ii) each Member shall be specially allocated items of Company income and gain for such Allocation Year in an amount equal to such Member's share of income or gain attributable to Finova Fees or Stock Proceeds, determined in accordance with such Member's Fee Percentage and Stock Percentage, respectively. (b) After giving effect to the special allocations set forth in Paragraphs 1, 2 and 3 of Appendix B hereto, and the additional special allocations set forth in Section 3.1(a) above, the Company shall allocate Profits, Losses and any items of Company income, gain, loss or deduction for any Allocation Year to the Members as follows: (i) Losses and any items of Company expense or deduction for such Allocation Year shall be allocated (x) first, to those Members with positive Capital Account balances in proportion to such positive Capital Account balances, until the Capital Accounts of such Members have been reduced to zero, (y) second, to the Members in accordance with their Fee Percentages, until an amount equal to the Senior Loan Shortfall Amount has been allocated pursuant to this clause (y), and (z) thereafter, to the Members in accordance with their Debt Percentages. (ii) Profits and any items of Company income or gain for such Allocation Year shall be allocated (x) first, to reverse any Losses (or items thereof) allocated to the Members pursuant to Section 3.1(b)(i) in the reverse of the order in which they were previously allocated, and (y) thereafter, to the Members pro rata in accordance with their Debt Percentages. 3.2 Additional Allocations. ---------------------- Additional provisions respecting allocations are set forth in Appendix B hereto and are incorporated by reference herein. SECTION 4 DISTRIBUTIONS 4.1 Distributions. ------------- Subject to Section 2.3(e) hereof: (a) The Finova Fees shall be distributed to the Members at such times as the Members shall determine in proportion to their Fee Percentages; (b) Any Stock Proceeds shall be distributed to the Members at such times as the Members shall determine in proportion to their Stock Percentages; and (c) Available Cash, if any, shall be distributed to the Members at such times as the Members shall determine in proportion to their Debt Percentages. 13 4.2 Return of Distributions. ----------------------- Except as required by law, no Member shall be required to restore to the Company any funds properly distributed to it pursuant to this Section 4 or Section 10 hereof; provided, however, that nothing herein shall affect the -------- ------- obligation to make any Required Capital Contributions. SECTION 5 MANAGEMENT 5.1 Management by Members. --------------------- (a) All powers to control and manage the Business and affairs of the Company shall be exclusively vested in the Members and the Members may exercise all powers of the Company and do all such lawful acts as are not by statute, the Certificate or this Agreement prohibited, and in so doing shall have the right and authority to take all actions which the Members deem necessary, useful or appropriate for the management and conduct of the Business. (b) Except as otherwise provided in this Agreement, including, without limitation, Section 2.3(e) (relating to a defaulting Member's loss of voting, consent and other rights) and Section 5.5 (relating to BH Finance's control of matters relating to the Senior Loan), or as required by the Act, all matters requiring approval of the Members or relating to the management of the Business and affairs of the Company, including acting in the capacity of Berkadia Manager, shall require the consent of both Members and the Company shall act only by the affirmative vote of both Members. (c) The Members shall have the power to delegate authority to such officers, employees, agents and representatives of the Company as it may from time to time deem appropriate. Any delegation of authority to take any action must be approved in the same manner as would be required to approve such action directly. 5.2 Meetings of the Members; Approval; Expedited Decision. ----------------------------------------------------- (a) The Members shall meet at such times as they may agree. (b) For all matters under this Agreement or under the Act for which the consent, approval or affirmative vote of a Member is required, such Member's consent, approval or affirmative vote may be given (i) at a physical meeting of the Members or (ii) at a meeting held by means through which all persons participating in the meeting can hear and respond to each other, provided that a summary of such other meeting is promptly delivered to the Members in writing, followed, in the case of a facsimile transmission, by hard copy sent by recognized overnight delivery service or U.S. mail, postage and charges prepaid, addressed as described in Section 12.1 hereof, or to such other address as a Member may from time to time specify by notice to the other Member. 14 (c) Notwithstanding anything to the contrary in this Section 5.2, the Members may take any action without a meeting that may be taken by the Members under this Agreement if such action is approved by the written consent of all Members. (d) In addition to the methods set forth above, a Member may solicit the expedited decision of the other Member with respect to any matter under this Agreement by having its Designated Representative contact, by telephone, facsimile or other agreed means, the other Member's Designated Representative. "Designated Representative" shall mean, in the case of a Member, its authorized ------------------------- representative as identified by such Member in a written notice to the other Member. Upon receipt of a request for an expedited decision by a Member's Designated Representative, the recipient Member's Designated Representative shall use reasonable efforts to deliver a written decision, consent, approval, disapproval or other relevant response to the request within 48 hours following receipt from the requesting Member (or otherwise) of all available information reasonably required to reach such a decision. The failure of a Member's Designated Representative to timely respond in writing to such a request shall be treated as such Member's disapproval or decision not to consent with respect to the matter involved. Any expedited decision reached in accordance with this paragraph shall be valid only if the relevant communication is delivered in writing, followed, in the case of a facsimile transmission, by hard copy sent by recognized overnight delivery service or U.S. mail, postage and charges prepaid, addressed as described in Section 12.1 hereof, or to such other address as a Member may from time to time specify by notice to the other Member. 5.3 Duties and Obligations of the Members. ------------------------------------- (a) The Members shall cause the Company to conduct its Business and operations separate and apart from that of any Member or its Affiliates, including, without limitation, (i) segregating Company assets and not allowing funds or other assets of the Company to be commingled with the funds or other assets of, held by, or registered in the name of, any Member or its Affiliates, (ii) maintaining books and financial records of the Company separate from the books and financial records of any Member or its Affiliates, and observing all Company procedures and formalities, including, without limitation, maintaining minutes of Company meetings and acting on behalf of the Company only pursuant to due authorization of the Members, (iii) causing the Company to pay its liabilities from assets of the Company, and (iv) causing the Company to conduct its dealings with third parties in its own name and as a separate and independent entity. (b) The Members shall take all actions which may be necessary or appropriate (i) for the continuation of the Company's valid existence as a limited liability company under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Members or to enable the Company to conduct the business in which it is engaged and (ii) for the accomplishment of the Company's purposes, in accordance with the provisions of this Agreement and applicable laws and regulations. (c) A Member shall not have any duties, fiduciary or otherwise, to the Company or the other Member, other than the contractual obligations of such Member set forth herein. 15 5.4 Reimbursements. -------------- (a) Except as otherwise specified in this Agreement, and subject to reimbursement by FNV or FCC pursuant to the Commitment and the Annexes thereto, each Member shall pay its own costs and expenses incurred and paid by such Member in the conduct of the Company's Business, including, without limitation, any and all costs and expenses incurred in negotiating and documenting the Commitment and the Management Agreement, and participating in the formulation of the chapter 11 plan for FNV and its subsidiaries (whether directly or in the Company's capacity as Berkadia Manager). Without limiting the generality of the foregoing, the Company shall not be responsible for the costs and expenses resulting from the performance by the Original Leucadia Member or any Affiliate thereof of its obligations under the Management Agreement. (b) Notwithstanding the foregoing, the Members intend that all costs and expenses incurred after the Effective Date in negotiating and documenting the Outside Financing and the Senior Loan, and any other expenses incurred in the operation of the Company's Business (other than Covered Losses) (whether directly or in the Company's capacity as Berkadia Manager) shall be borne by the Company; provided, however, that direct costs and expenses of a Member, such as -------- ------- salaries or benefits of its employees or travel expenses, shall not be treated as expenses of, or paid by, the Company, and such Member shall not be entitled to any reimbursement hereunder with respect thereto. (c) To the extent that any costs or expenses of the Members or the Company are reimbursed to the Company by FCC or FNV pursuant to the terms of the Commitment, the Senior Loan Documents or otherwise (whether directly or indirectly through Berkadia), such amounts shall promptly be distributed to the Members who (or whose predecessors) bore such costs or expenses (if costs or expenses paid by a Member or its predecessors are being reimbursed), or to the Members pro rata in accordance with the percentage of such cost or expense paid by the Members in accordance with Section 2.3(c) (if costs or expenses paid by the Company are being reimbursed). 5.5 BH Finance Control of Commitment and Senior Loan. ------------------------------------------------ Notwithstanding any other provision of this Agreement, and without limiting the generality of Section 5.1, decisions by the Company, including in its capacity as Berkadia Manager, relating to any act taken or not taken by the Company or Berkadia with respect to the Commitment or the Senior Loan, including, without limitation, any decisions relating to the documentation or administration of such Senior Loan or arising out of any default, decisions relating to enforcement or to the waiver of any covenants or requirements with respect to the Commitment or the Senior Loan, and the control of any contest related thereto, shall be made by BH Finance on behalf of the Company in its sole and absolute discretion, after consultation with WMAC. The Company shall promptly reimburse BH Finance for its reasonable costs and expenses, including attorneys fees, incurred in connection with any investigation or dispute arising out of any such occurrence. Without limiting the foregoing, so long as the Senior Loan is outstanding, decisions of the Company, including in its capacity as Berkadia Manager, in connection with requests by FNV or its subsidiaries to repurchase any 7.5% Senior Secured 16 Notes Maturing 2009 with Contingent Interest due 2016 of FNV shall be made by BH Finance on behalf of the Company after consultation with WMAC. 5.6 Withdrawal. ---------- Except as otherwise provided in Sections 4, 5.4(c) and 10 hereof, no Member shall demand or receive a return on or of its Capital Contributions or withdraw or resign from the Company without the consent of the other Member. Under circumstances requiring a return of any Capital Contributions, no Member has the right to receive property other than cash except as may be specifically provided herein. 5.7 Member Compensation. ------------------- No Member shall receive any interest, salary or drawing with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Company, or otherwise, in its capacity as a Member, except as otherwise provided in this Agreement. 5.8 Member Liability. ---------------- Subject to Section 2.3(b), no Member shall be liable to any third party under a judgment, decree or order of a court, or in any other manner for the debts or any other obligations or liabilities of the Company. Except as required by applicable law or this Agreement, a Member shall be liable only to make its Capital Contributions and shall not be required to restore a deficit balance in its Capital Account or to lend any funds to the Company or, apart from its Capital Contributions, to make any additional contributions, assessments or payments to the Company. SECTION 6 REPRESENTATIONS AND WARRANTIES 6.1 In General. ---------- As of the date hereof, each Member hereby makes each of the representations and warranties applicable to such Member as set forth in Section 6.2 hereof, and such warranties and representations shall survive the execution of this Agreement. 6.2 Representations and Warranties. ------------------------------ Each Member hereby represents and warrants that: (a) Due Incorporation or Formation; Authorization of Agreement. Such ---------------------------------------------------------- Member is a corporation or limited liability company duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation or formation and has the company power and authority to own its property and carry on its business as owned and carried on at the date hereof and as contemplated hereby. Such Member is duly licensed or qualified to do business and in good standing in each of the jurisdictions in which the failure to be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder. Such Member has the company power and authority to execute and deliver this Agreement and to perform its obligations hereunder and the execution, 17 delivery, and performance of this Agreement has been duly authorized by all necessary company action. This Agreement constitutes the legal, valid, and binding obligation of such Member. (b) No Conflict with Restrictions; No Default. Neither the ----------------------------------------- execution, delivery, and performance of this Agreement, nor the consummation by such Member of the transactions contemplated hereby (i) will conflict with, violate, or result in a breach of any of the terms, conditions, or provisions of any law, regulation, order, writ, injunction, decree, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator, applicable to such Member, (ii) will conflict with, violate, result in a breach of, or constitute a default under any of the terms, conditions, or provisions of the articles of incorporation or bylaws of such Member, or of any material agreement or instrument to which such Member is a party or by which such Member is or may be bound or to which any of its material properties or assets is subject, (iii) will conflict with, violate, result in a breach of, constitute a default under (whether with notice or lapse of time or both), accelerate or permit the acceleration of the performance required by, give to others any material interests or rights, or require any consent, authorization, or approval under any indenture, mortgage, lease agreement, or instrument to which such Member is a party or by which such Member is or may be bound, or (iv) will result in the creation or imposition of any lien upon any of the material properties or assets of such Member. (c) Governmental Authorizations. Any registration, declaration, or --------------------------- filing with, or consent, approval, license, permit, or other authorization or order by, any governmental or regulatory authority, domestic or foreign, that is required in connection with the valid execution, delivery, acceptance and performance by such Member under this Agreement, or the consummation by such Member of any transaction contemplated hereby has been completed, made, or obtained on or before the Effective Date. (d) Litigation. There are no actions, suits, proceedings, or ---------- investigations pending or, to the knowledge of such Member threatened against or affecting such Member or any of its wholly-owned Affiliates or any of their properties, assets, or businesses in any court or before or by any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation could lead to any action, suit, or proceeding, which if adversely determined could) reasonably be expected to materially impair such Member's ability to perform its obligations under this Agreement, and such Member has not received any currently effective notice of any default, and such Member is not in default, under any applicable order, writ, injunction, decree, permit, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected to materially impair such Member's ability to perform its obligations under this Agreement. SECTION 7 ACCOUNTING, BOOKS AND RECORDS 7.1 Accounting, Books and Records. ----------------------------- The Company shall keep on site at its principal place of business such books and records relating to the Company and its affairs as it reasonably deems appropriate, and any Member or 18 its designated representative shall have the right to have reasonable access to and inspect and copy the contents of such books or records, subject to compliance by such Member with the safety, security and confidentiality procedures and guidelines of the Company, as such procedures and guidelines may be established from time to time. 7.2 Reports. ------- The Company shall cause to be delivered to each Member such periodic reports and financial statements as may be reasonably requested by a Member from time to time. 7.3 Tax Matters. ----------- Subject to the agreement of both Members, the Tax Matters Member (as defined below) shall make on behalf of the Company any and all elections for federal, state, local, and foreign tax purposes that it determines appropriate, and shall represent the Company and the Members before taxing authorities or courts of competent jurisdiction in tax matters affecting the Company or the Members in their capacities as Members, and file any tax returns and execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind the Members with respect to such tax matters or otherwise affect the rights of the Company and the Members. BH Finance is specifically authorized to act as the "Tax Matters Member" under ------------------ the Code and in any similar capacity under state or local law. SECTION 8 AMENDMENTS 8.1 Amendments. ---------- This Agreement may be amended or modified only by a written instrument signed by each Member. SECTION 9 TRANSFERS 9.1 Restrictions on Transfers. ------------------------- Except as otherwise permitted by this Agreement, no Member shall Transfer all or any portion of its Interest. 9.2 Permitted Transfers. ------------------- Subject to the conditions and restrictions set forth in Section 9.3 hereof, a Member may at any time Transfer all, but not less than all, of its Interest to (a) any other Member or wholly-owned Affiliate of another Member, (b) any wholly-owned Affiliate of the transferor (or of the Original Berkshire Member or the Original Leucadia Member), or (c) any other Person, subject to receipt, in the case of clause (c), of the prior written consent of the other Member in its absolute discretion if the Senior Loan has not then been paid in full (any such Transfer pursuant to clauses (a), (b) or (c) being referred to in this Agreement as a "Permitted Transfer"). Notwithstanding the foregoing, a Member may ------------------ transfer less than all of its Interests to one or more wholly-owned Affiliates (or wholly-owned Affiliates of the Original Berkshire Member, in 19 the case of BH Finance, or of the Original Leucadia Member, in the case of WMAC) (each, an "Affiliated Member"); provided, however, that for purposes hereof, ----------------- -------- ------- all of a Member's Affiliated Members shall be deemed to constitute one and the same Member and any action or consent required hereunder with respect to BH Finance's or WMAC's Affiliated Members shall be given solely through the action or consent of BH Finance or WMAC, as agent for all BH Finance or WMAC Affiliated Members, as applicable. Any distribution or allocation to be made hereunder shall be made as if neither BH Finance nor WMAC had any Affiliated Members, shall be made as BH Finance or WMAC directs to one Member as agent for all BH Finance or WMAC Affiliated Members, as applicable, and thereafter BH Finance or WMAC, as applicable, shall be responsible for apportioning such distribution among their respective Affiliated Members, if any, according to their respective Interests. A Transfer to an Affiliated Member shall not relieve the transferor of its obligations hereunder. 9.3 Conditions to Permitted Transfers. --------------------------------- A Transfer shall not be treated as a Permitted Transfer under Section 9.2 hereof unless and until the following conditions are satisfied: (a) The transferor and transferee shall execute and deliver to the Company such documents and instruments of conveyance as may be necessary or appropriate in the opinion of counsel to the Company to effect such Transfer. The Company shall be reimbursed by the transferor and/or transferee for all costs and expenses that it reasonably incurs in connection with such Transfer. (b) The transferor and transferee shall furnish the Company with the transferee's taxpayer identification number, sufficient information to determine the transferee's initial tax basis in the Interest transferred, and any other information reasonably necessary to permit the Company to file all required federal and state tax returns and other legally required information statements or returns. Without limiting the generality of the foregoing, the Company shall not be required to make any distribution otherwise provided for in this Agreement with respect to any transferred Interest until it has received such information. (c) The transferee of Interests (other than, with respect to clauses (i) and (ii) below, a transferee that was a Member prior to the Transfer) shall, by written instrument in form and substance reasonably satisfactory to the nontransferring Member (and, in the case of clause (iii) below, the transferor Member), (i) make representations and warranties to the nontransferring Member equivalent to those set forth in Section 6, (ii) accept and adopt the terms and provisions of this Agreement, including, without limitation, this Section 9 and Section 11, and (iii) assume the obligations of the transferor Member under this Agreement with respect to the transferred Interest. (d) The transferor shall not be relieved of its obligations hereunder. 9.4 Prohibited Transfers. -------------------- (a) Any purported Transfer of an Interest that is neither a Permitted Transfer nor a Transfer of less than all of a Member's Interests to one or more Affiliated Members in compliance with Section 9.2, shall be null and void and of no force or effect whatever; provided, -------- 20 however, that if the Company is required by law to recognize a Transfer that - ------- is not a Permitted Transfer, the Interest Transferred shall be strictly limited to the transferor's rights to allocations and distributions as provided by this Agreement with respect to the transferred Interest, which allocations and distributions may be applied (without limiting any other legal or equitable rights of the Company) to satisfy any debts, obligations, or liabilities for damages that the transferor or transferee of such Interest may have to the Company, and such transferee shall not become a Member of the Company. (b) In the case of a Transfer or attempted Transfer of an Interest that is neither a Permitted Transfer nor a Transfer of less than all of a Member's Interests to one or more Affiliated Members in compliance with Section 9.2, the parties engaging or attempting to engage in such Transfer shall be liable to indemnify and hold harmless the Company and the other Members from all cost, liability, and damage that any of such indemnified Members may incur (including, without limitation, incremental tax liabilities, lawyers' fees and expenses) as a result of such Transfer or attempted Transfer and efforts to enforce the indemnity granted hereby. 9.5 Rights of Unadmitted Assignees. ------------------------------ A Person who acquires an Interest but who is not admitted as a substituted Member pursuant to Section 9.6 hereof shall be entitled only to allocations and distributions with respect to such Interest in accordance with this Agreement, and shall have no right to any information or accounting of the affairs of the Company, shall not be entitled to inspect the books or records of the Company, and shall not have any of the rights of a Member under the Act or this Agreement. 9.6 Admission of Substituted Members. -------------------------------- Subject to the other provisions of this Section 9, a transferee of an Interest in a Permitted Transfer shall be admitted to the Company as a substituted Member. 9.7 Distributions and Allocations in Respect of Transferred Interest. ---------------------------------------------------------------- If any Interests are Transferred during any Allocation Year in compliance with the provisions of this Section 9, Profits, Losses, each item thereof, and all other items attributable to the Transferred Interest for such Allocation Year shall be divided and allocated between the transferor and the transferee by taking into account their varying Percentage Interests during the Fiscal Year in accordance with Code Section 706(d), using any conventions permitted by law and selected by the Members. All distributions on or before the date of such Transfer shall be made to the transferor, and all distributions thereafter shall be made to the transferee. SECTION 10 DISSOLUTION AND WINDING UP 10.1 Dissolution Events. ------------------ Except as otherwise unanimously agreed to by the Members, the Company shall dissolve and shall commence winding up and liquidating upon the first to occur of any of the following (each a "Dissolution Event"): ------------------ 21 (a) The unanimous vote of the Members to dissolve, wind up, and liquidate the Company; (b) A judicial determination that an event has occurred that makes it unlawful, impossible or impractical to carry on the Business; (c) The dissolution or liquidation of a Member or the taking of any action by its directors or a majority of its stockholders looking to the dissolution or liquidation of such Member, unless substantially all assets of such Member are transferred or are to be transferred to a wholly-owned Affiliate of such Member (or of the Original Berkshire Member or the Original Leucadia Member); (d) The bankruptcy or insolvency of a Member or the occurrence of any other event which would permit a trustee or receiver to acquire control of the affairs or assets of a Member; or (e) The payment in full of each of the Senior Loan and the Outside Financing, unless waived by both Members. The Members hereby agree that, notwithstanding any provision of the Act, the Company shall not dissolve prior to the occurrence of a Dissolution Event. 10.2 Winding Up. ---------- Upon the occurrence of a Dissolution Event, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Members, and no Member shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Company's Business and affairs; provided, that all covenants contained in this Agreement and obligations - -------- provided for in this Agreement shall continue to be fully binding upon the Members until such time as the Company's property has been distributed pursuant to this Section 10.2 and the Certificate has been canceled pursuant to the Act. The Liquidator shall be responsible for overseeing the winding up and dissolution of the Company, which winding up and dissolution shall be completed within one (1) year of the occurrence of the Dissolution Event. The Liquidator shall take full account of the Company's liabilities and property and shall cause the property or the proceeds from the sale thereof, to the extent sufficient therefor, to be applied and distributed, to the maximum extent permitted by law, in the following order: (a) First, to creditors (including Members who are creditors, to the extent otherwise permitted by law) in satisfaction of all of the Company's debts and other liabilities (whether by payment or the making of reasonable provision for payment thereof); and (b) The balance, if any, to the Members in accordance with Section 4.1 hereof, by the end of the taxable year of the Company during which the liquidation of the Company occurs (or, if later, by 90 days after the date of liquidation). Except as provided in the next sentence, if any Member has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for all 22 periods), such Member shall have no obligation to make any contribution to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or to any other Person for any purpose whatsoever. Notwithstanding the foregoing, in connection with the liquidation of the Company, and prior to the application and distribution of Company assets pursuant to clauses (a) and (b) above, each Member shall contribute to the Company an amount equal to any portion of its Required Capital Contributions that has not previously been contributed (or deemed contributed), including interest thereon to the extent required by Section 2.3(e); provided, however, -------- ------- that notwithstanding anything to the contrary set forth in Section 2.3(b) hereof, but subject to Section 2.3(e), the amount, if any, required to be contributed by the Members pursuant to Section 2.3(b) at the time of any such liquidation of the Company shall be contributed as follows: (i) first, pro rata in accordance with the Members' respective Fee Percentages, until the Members have contributed an amount pursuant to this clause (i) equal to the Senior Loan Shortfall Amount, if any, at the time of such liquidation; (ii) second, 100 percent by BH Finance, until all contributions made under Section 2.3(b) (including contributions paid or deemed paid under Section 2.3(e), other than any interest component thereof) or clause (i) or (ii) hereof during the life of the Company have been made 90 percent by BH Finance and 10 percent by WMAC; and (iii) thereafter, pro rata in accordance with the Members' respective Debt Percentages. No Member shall receive additional compensation for any services performed pursuant to this Section 10. 10.3 Rights of Members. ----------------- Except as otherwise provided in this Agreement, each Member shall look solely to the Company's property for the return of its Capital Contribution and has no right or power to demand or receive property other than cash from the Company, and if the assets of the Company remaining after payment or discharge of the debts or liabilities of the Company are insufficient to return such Capital Contribution, a Member shall have no recourse against the Company or the other Member. 10.4 Termination. ----------- Upon completion of the distribution of the Company's property as provided in this Section 10, the Company shall be terminated, and the Liquidator shall cause the filing of the Certificate of Cancellation pursuant to Section 18-203 of the Act and shall take all such other actions as may be necessary to terminate the Company. 10.5 Allocations During Period of Liquidation. ---------------------------------------- During the period commencing on the first day of the Fiscal Year during which a Dissolution Event occurs and ending on the date on which all of the assets of the Company have been distributed to the Members pursuant to Section 10.2 hereof (the "Liquidation Period"), the Members shall continue to share ------------------ Profits, Losses, and other items of Company income, gain, loss or deduction in the manner provided in Section 3 hereof and Appendix B hereto. 23 10.6 The Liquidator. -------------- (a) The "Liquidator" shall mean a Person appointed by the Members to ---------- oversee the liquidation of the Company. The Liquidator may be an officer, a Member or any other Person. (b) The Company is authorized to pay a reasonable fee to the Liquidator for its services performed pursuant to this Section 10 and to reimburse the Liquidator for its reasonable costs and expenses incurred in performing those services. (c) The Company shall indemnify, save harmless, and pay all judgments and claims against such Liquidator or any officers, directors, agents or employees of the Liquidator relating to any liability or damage incurred by reason of any act performed or omitted to be performed by the Liquidator, or any officers, directors, agents or employees of the Liquidator in connection with the liquidation of the Company, including reasonable attorneys' fees incurred by the Liquidator, officer, director, agent or employee in connection with the defense of any action based on any such act or omission, which attorneys' fees may be paid as incurred, except to the extent such liability or damage is caused by the fraud, gross negligence, intentional misconduct of, or a knowing violation of the laws by the Liquidator which was material to the cause of action. 10.7 Form of Liquidating Distributions. --------------------------------- For purposes of making distributions required by Section 10.2 hereof, the Liquidator may determine whether to distribute all or any portion of the property in-kind or to sell all or any portion of the property and distribute the proceeds therefrom; provided, however, that no Member shall be required to -------- ------- accept property in-kind in lieu of cash if cash is being delivered to the other Member; provided, further, that the FNV Stock, if any, shall be distributed in- -------- ------- kind in accordance with the Members' Stock Percentages. SECTION 11 AGREEMENTS RELATING TO DEALINGS WITH FNV AND THE FNV STOCK 11.1 Treatment of Management Fees. ----------------------------- The Members hereby acknowledge and agree that all management and other services to be provided by the Original Leucadia Member or its Affiliates pursuant to the terms of the Management Agreement are activities conducted on behalf of the Company, and that any management or similar fees received by the Original Leucadia Member, Leucadia International or any of their Affiliates under the Management Agreement are received as a Member and that such fees are income of the Company to be shared evenly between the Members. Consequently, WMAC and the Original Leucadia Member shall promptly pay over (or cause to be paid over) to BH Finance 50 percent of any such fee paid directly to the Original Leucadia Member, Leucadia International or any of their Affiliates. Any such payment to BH Finance shall not be treated as a contribution to the Company. In the event that any such fee is paid by FNV or an Affiliate directly to the Company, such fee shall be treated as a Finova Fee for purposes of this Agreement. The Original Leucadia Member and the Members hereby agree that this Section 11.1 shall survive any dissolution and winding up of the Company pursuant to Section 10. 24 11.2 Cooperation; Provision of Information. -------------------------------------- Each Member shall cooperate and coordinate in the drafting and formulation of FNV's or its Affiliates' chapter 11 plan or plans of reorganization, including without limitation in the Company's role as Berkadia Manager. The Members, the Original Berkshire Member and the Original Leucadia Member shall keep one another fully and promptly informed of developments in FNV's or its Affiliates' business or relationships with or affecting its creditors, including any notices from its lenders, suppliers or advisors or any notices from any third party related to its creditors, in each case whether such information is obtained from FNV or its Affiliates pursuant to the terms of the Management Agreement or otherwise. Each Member shall be entitled to, at its option and expense, appear and be heard in the Bankruptcy Court on any matter at issue in the bankruptcy cases. Without limiting the generality of the foregoing, the Company shall take (or, in its capacity as Berkadia Manager, cause Berkadia to take) the following actions only if first approved by each Member: (i) file any pleading with, or take any legal and/or factual position or action in the Bankruptcy Court; (ii) approve the terms or form of any pleading, including any plan of reorganization, disclosure statement or related proposed bankruptcy court order; or (iii) subject to Section 5.5, waive a term or condition of any agreement, plan of reorganization or bankruptcy court order. 11.3 Designation of Observers Pursuant to Management Agreement. ---------------------------------------------------------- BH Finance shall be entitled to designate at least one (1) of the three (3) persons that the Original Leucadia Member is entitled to designate to the Board of Directors of FNV pursuant to the terms of the Management Agreement, and the Original Leucadia Member shall cause such BH Finance designee to be so designated. 11.4 Exercise of Management Agreement Approval Rights. ------------------------------------------------- The Original Leucadia Member shall not, nor shall it permit any of its Affiliates to, provide its consent or approval with respect to any act or omission by FNV or its Affiliates for which the Original Leucadia Member's (or any Affiliate's) consent or approval is required under the terms of the Management Agreement or otherwise, without the written consent of BH Finance, which decision regarding consent shall be made promptly (in light of its circumstances) after receipt of notice seeking such consent. Without limiting the generality of the foregoing, without the written consent of BH Finance, the Original Leucadia Member shall not, nor shall it permit any of its Affiliates to, (a) agree to any amendment or cancellation of, or waiver of any of its rights or FNV's obligations under, the Management Agreement, or (b) prior to the effectiveness of FNV's plan of reorganization, consent to or approve of FNV undertaking, or agreeing or committing to undertake, whether in writing or otherwise, to any of the matters set forth in Annex A to the Management Agreement. 11.5 Agreements Relating to the FNV Stock. ------------------------------------ Notwithstanding anything to the contrary set forth in this Agreement, the following provisions shall govern the ownership and control of the common stock of FNV acquired by Berkadia in connection with the FNV plan of reorganization (the "FNV Stock"), including without limitation actions by the Company in the --------- Company's capacity as a member of Berkadia and as Berkadia Manager. 25 (a) Except in the event of a liquidation of Berkadia pursuant to Section 10 of the Berkadia Operating Agreement, or as otherwise unanimously agreed to by the Members, the Company, the Original Berkshire Member, the Original Leucadia Member and the Members shall cause the FNV Stock to be transferred and delivered to, held directly by, and not distributed by, Berkadia. (b) From and after the effective date of FNV's plan of reorganization, if Berkadia determines to exercise any right it has to nominate an even number of directors to FNV's Board of Directors, then the Company, in its capacity as Berkadia Manager, shall permit each Member to designate one-half of the total number of persons that Berkadia is choosing to nominate to such Board of Directors, and if Berkadia determines to exercise any right it has to nominate an odd number of directors, then, out of the number of directors that Berkadia is choosing to nominate to such Board of Directors, the Company, in its capacity as Berkadia Manager, shall designate one director unanimously agreed upon by the Members, and of the remaining number of nominees that Berkadia is choosing to nominate, shall permit each Member to designate one-half. (c) The Company, in its capacity as Berkadia Manager, shall cause Berkadia to vote its FNV Stock as required by the Voting Agreement among FNV, Berkadia, the Original Berkshire Member and the Original Leucadia Member, and otherwise in such manner as is unanimously agreed by the Members; provided, --------- however, that if the Members cannot unanimously agree, then the Company shall - -------- cause Berkadia to vote its FNV Stock in the manner directed by each Member with respect to that number of Berkadia's shares of FNV Stock as is in proportion to such Member's Stock Percentage. 11.6 Purchase of Additional FNV Securities or Interests or Participations -------------------------------------------------------------------- in Bank Loans. - -------------- If, during the term of this Agreement, a Member, or any Affiliate thereof, desires to acquire additional securities (whether debt or equity) of, or interests or participations in bank loans of, FNV or its Affiliates, then such Member or Affiliate may not proceed with such transaction unless such Member affords the other Member a reasonable opportunity to acquire one-half of such securities or interests or participations in bank loans on the same terms and conditions. Notwithstanding the foregoing, WMAC and its Affiliates hereby waive any opportunity to acquire any portion of the 7.5% Senior Secured Notes Maturing 2009 with Contingent Interest due 2016 of FNV that BH Finance or its Affiliates may acquire pursuant to a tender offer in accordance with the plan of reorganization. SECTION 12 MISCELLANEOUS 12.1 Notices. ------- Any notice, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been delivered, given, and received for all purposes (i) if delivered personally to the Person or to an officer of the 26 Person to whom the same is directed, or (ii) when the same is actually received, if sent either by recognized overnight delivery service or registered or certified mail, postage and charges prepaid, or by facsimile, if such facsimile is followed by a hard copy of the facsimile communication sent promptly thereafter by recognized overnight delivery service or registered or certified mail, postage and charges prepaid, addressed as follows, or to such other address as such Person may from time to time specify by notice to the Members and the Company: (a) If to the Company, to the address determined pursuant to Section 1.4 hereof; and (b) If to a Member, to the address set forth on Appendix A hereto. 12.2 Covered Losses. --------------- (a) The Company shall indemnify and hold harmless any Member from any Covered Loss in excess of such Member's Proportionate Share of such Covered Loss. (b) If a Covered Loss is incurred by the Company, or if the Company indemnifies a Member from a Covered Loss pursuant to Section 12.2(a), each of the Members shall contribute to the Company as Required Capital Contributions, upon demand of the Company or any Member, the amount by which such Member's Proportionate Share exceeds the amount of such Covered Loss paid by such Member to date either directly or by Required Capital Contributions made to date pursuant to this Section 12.2(b). The Original Berkshire Member agrees to contribute (or cause to be contributed) to BH Finance, and the Original Leucadia Member agrees to contribute (or cause to be contributed) to WMAC, an amount sufficient in each case for such Member to fund its Required Capital Contributions as and when required under this Section 12.2(b). (c) In the event a Member or the Company becomes aware of a potential claim, event or state of affairs that could result in a Covered Loss, such Member or the Company shall promptly notify all of the Members thereof, and shall provide all Members with copies of all letters, pleadings or other documents in its possession which could or are alleged to form the material basis of any such claim or action; provided, that the failure to provide such -------- notice in a timely fashion shall not affect the parties' respective obligations hereunder except and only to the extent that any delay in providing such notice results in actual prejudice to another party. In any case, the Members shall cooperate with respect to the defense of any such claim or action to the extent that the Members are not adverse parties or have adverse interests therein. The Members shall jointly control the defense of any such claim or action. 12.3 Defaults by Original Members. ----------------------------- If the Original Berkshire Member or the Original Leucadia Member fails to fulfill its obligations under Section 2.3(d) or 12.2(b) hereof, then the Member that is not related to such original member shall have a direct claim against such original member for breach of contract hereunder, and the unrelated Member and the Company (at the sole direction of the unrelated Member) shall have all remedies available to either of them in law or equity with respect to such failure by the original member. 27 12.4 Binding Effect. -------------- Except as otherwise provided in this Agreement, every covenant, term, and provision of this Agreement shall be binding upon and inure to the benefit of the Members and their respective successors, transferees, and assigns. 12.5 Headings. -------- Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof. 12.6 Severability. ------------ Except as otherwise provided in the succeeding sentence, every provision of this Agreement is intended to be severable, and, if any term or provision of this Agreement is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement. The immediately preceding sentence shall be of no force or effect if the consequence of enforcing the remainder of this Agreement without such illegal or invalid term or provision would be to cause any Member to lose the material benefit of its economic bargain. 12.7 Governing Law. ------------- The laws of the State of Delaware shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights and duties arising hereunder. 12.8 WAIVER OF JURY TRIAL. -------------------- EACH OF THE MEMBERS, THE ORIGINAL BERKSHIRE MEMBER AND THE ORIGINAL LEUCADIA MEMBER IRREVOCABLY WAIVES TO THE EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT. 12.9 Arbitration. ------------ All claims, disputes and other matters in question arising out of, or relating to this Agreement or the performance thereof, including, without limitation, questions as to whether a matter is governed by this arbitration clause, shall be subject to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "AAA Rules") then ---------- pertaining, insofar as the AAA Rules are not inconsistent with the provisions expressly set forth in this Agreement, unless the parties mutually agree otherwise, and pursuant to the following procedures: (i) the arbitration shall take place in Chicago, Illinois, (ii) a single neutral arbitrator having at least ten (10) years experience in complex commercial arbitration involving financial and partnership or limited liability company issues shall be appointed in the manner specified in the AAA Rules; provided, that if the amount at issue -------- is greater than Twenty-Five Million Dollars ($25,000,000), then a panel of three (3) such neutral arbitrators shall be appointed in the manner 28 specified in the AAA Rules; (iii) each party will, upon the written request of the other party, provide the other with copies of documents relevant to the issues raised by any claim or counterclaim; (iv) each party shall have the right to take the deposition of one individual and any expert witness(es) designated by the other party; (v) other discovery may be ordered by the arbitrator(s) to the extent the arbitrator(s) deem additional discovery appropriate, and any dispute regarding discovery, including disputes as to the need therefor or the relevance or the scope thereof, shall be determined by the arbitrator(s), which determination shall be conclusive; (vi) the arbitrator(s) shall have sixty (60) days following their appointment in which to resolve the question at issue, unless the parties agree in writing to extend such period; (vii) the award rendered by the arbitrator(s) may grant any remedy or relief that the arbitrator(s) deem just and equitable within the scope of this Agreement, including, without limitation, damages, specific performance or injunctive relief, but may not include punitive damages or any remedy or relief that a court having jurisdiction thereof would not have the power to grant; (viii) judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof; (ix) all reasonable out-of-pocket costs and reasonable legal fees incurred by the prevailing party shall be paid by the nonprevailing party, except in the event that a non-arbitrated settlement is reached, in which case each party shall pay its own respective costs and fees incurred thereby; (x) subject to clause (ix), each party shall pay one-half of the costs and fees charged by the arbitrator(s) with regard to the submitted dispute; and (xi) the parties shall be entitled to seek preliminary injunctive relief or other extraordinary remedies in any court having jurisdiction thereof, to preserve the status quo pending the outcome of arbitration. 12.10 Counterpart Execution. --------------------- This Agreement may be executed in any number of counterparts with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and shall constitute one agreement. 12.11 Specific Performance. -------------------- Each Member (as well as, in the case of BH Finance, the Original Berkshire Member, and in the case of WMAC, the Original Leucadia Member) agrees with the other Member that such other Member would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy to which the non-breaching Member may be entitled, at law or in equity, the non-breaching Member shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and specifically to enforce the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction thereof. 12.12 Further Assurances. ------------------- Each Member covenants and agrees on behalf of itself, its successors and its assigns, without further consideration, to prepare, execute, acknowledge, file and deliver such other instruments, documents and statements, and to take such other action as may be required by law or reasonably necessary to effectively carry out the purposes of this Agreement. 29 12.13 Entire Agreement. ----------------- This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and fully supersedes any and all prior or contemporaneous agreements or understandings between the parties hereto pertaining to the subject matter hereof. 30 IN WITNESS WHEREOF, the parties have executed and entered into this Operating Agreement of the Company as of the day first above set forth. BH FINANCE LLC By: /s/ Marc D. Hamburg --------------------------------- Name: Marc D. Hamburg Title: President WMAC INVESTMENT CORPORATION By: /s/ Joseph A. Orlando --------------------------------- Name: Joseph A. Orlando Title: Vice President ACKNOWLEDGED AND AGREED, provided that, except as and to the extent specifically set forth in this Operating Agreement, the signatories below are not undertaking to cause or procure the performance of obligations undertaken herein by the Members. BERKSHIRE HATHAWAY INC. By: /s/ Marc D. Hamburg ------------------------------- Name: Marc D. Hamburg Title: Vice President and Chief Financial Officer LEUCADIA NATIONAL CORPORATION By: /s/ Joseph A. Orlando -------------------------------- Name: Joseph A. Orlando Title: Vice President and Chief Financial Officer APPENDIX A Attached to and Made a Part of the Operating Agreement of Berkadia Management LLC Members -------
Name and Address Debt Percentage Fee Percentage Stock Percentage - ---------------- --------------- -------------- ---------------- BH Finance LLC 90% 50% 50% 1440 Kiewit Plaza Omaha, Nebraska 68131 Attn: Marc Hamburg Facsimile: (402) 346-3375 WMAC Investment Corporation 10% 50% 50% 315 Park Avenue South New York, New York 10010 Attn: Joseph Steinberg Facsimile: (212) 598-4869
APPENDIX B Attached to and Made a Part of the Operating Agreement of Berkadia Management LLC Additional Allocations ---------------------- 1. Special Allocations. ------------------- The following special allocations shall be made in the following order: (a) Minimum Gain Chargeback. Except as otherwise provided in Section ----------------------- 1.704-2(f) of the Regulations, notwithstanding any other provision of Section 3 of the Agreement and this Appendix B, if there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be specially allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Member's share of the net decrease in Company Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This Paragraph 1(a) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(f) of the Regulations and shall be interpreted consistently therewith. (b) Member Minimum Gain Chargeback. Except as otherwise provided in ------------------------------ Section 1.704-2(i) (4) of the Regulations, notwithstanding any other provision of Section 3 of the Agreement and this Appendix B, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to Member Nonrecourse Debt during any Allocation Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Member's share of the net decrease in Member Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This Paragraph 1(b) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently therewith. (c) Qualified Income Offset. In the event any Member unexpectedly ----------------------- receives any adjustments, allocations, or distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6) of - - - - - - the Regulations, items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of the Member as quickly as possible; provided that an allocation pursuant to this Paragraph -------- 1(c) shall Appendix B-1 be made only if and to the extent that the Member would have an Adjusted Capital Account Deficit after all other allocations provided for in Section 3 of the Agreement and this Appendix B have been tentatively made as if this Paragraph 1(c) were not part of this Appendix B. (d) Gross Income Allocation. In the event any Member has a deficit ----------------------- Capital Account at the end of any Allocation Year which is in excess of the sum of the amount such Member is obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible; provided that an allocation -------- pursuant to this Paragraph 1(d) shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in Section 3 of the Agreement and this Appendix B have been made as if Paragraph 1(c) hereof and this Paragraph 1(d) were not part of this Appendix B. (e) Nonrecourse Deductions. Nonrecourse Deductions for any Allocation ---------------------- Year shall be specially allocated to the Members in proportion to their respective Debt Percentages. (f) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for ----------------------------- any Allocation Year shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i) (1). (g) Section 754 Adjustments. To the extent an adjustment to the adjusted ----------------------- tax basis of any Company asset, pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or - - 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital - - Accounts as the result of a distribution to a Member in complete liquidation of such Member's interest in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in accordance with their interests in the Company in the event Regulations Section 1.704- 1(b)(2)(iv)(m)(2) applies, or to the Member to whom such distribution was made - - in the event Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies. - - 2. Curative Allocations. -------------------- The allocations set forth in Paragraphs 1(a) through (g) and Paragraph 3 hereof (the "Regulatory Allocations") are intended to comply with certain ---------------------- requirements of the Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Paragraph 2. Therefore, notwithstanding any other provision of Section 3 of the Agreement and this Appendix B (other than the Regulatory Allocations), the Company shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Member's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Section 3 of the Agreement. Appendix B-2 3. Loss Limitation. --------------- Losses allocated pursuant to Section 3 of the Agreement shall not exceed the maximum amount of Losses that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Allocation Year. In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant to Section 3 of the Agreement, the limitation set forth in this Paragraph 3 shall be applied on a Member by Member basis and Losses not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Member's Capital Accounts so as to allocate the maximum permissible Losses to each Member under Section 1.704-1(b)(2)(ii)(d) of - the Regulations. 4. Other Allocation Rules. ---------------------- (a) For purposes of determining the Profits, Losses, or any other items allocable to any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Members using any permissible method under Code Section 706 and the Regulations thereunder. (b) The Members are aware of the income tax consequences of the allocations made by Section 3 of the Agreement and this Appendix B and hereby agree to be bound by such provisions in reporting their shares of Company income and loss for income tax purposes. (c) Solely for purposes of determining a Member's proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Regulations Section 1.752-3(a) (3), the Members' interests in Company profits are in proportion to their Debt Percentages. (d) To the extent permitted by Section 1.704-2(h)(3) of the Regulations, the Company shall endeavor to treat any distributions as having been made from the proceeds of a Nonrecourse Liability or a Member Nonrecourse Debt only to the extent that such distributions would cause or increase an Adjusted Capital Account Deficit for any Member. 5. Tax Allocations; Code Section 704(c). ------------------------------------ (a) In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its initial Gross Asset Value (computed in accordance with the definition of Gross Asset Value). (b) In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Regulations thereunder. Appendix B-3 (c) Any elections or other decisions relating to such allocations shall be made by the Members in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Paragraph 5 are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member's Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement. (d) The Members shall, for federal income tax purposes, share any original issue discount recognized by the Company 50 percent each. (e) Subject to the foregoing, for federal income tax purposes each item of income, gain, loss or deduction that corresponds to an item of income, gain, loss or expense taken into account in calculating Profits or Losses or specially allocated under Section 3.1(a) of the Agreement or Section 1, 2 or 3 of this Appendix B (a "Book Item") shall be allocated between the Members in the same proportion as the corresponding Book Item is allocated between the Members. Appendix B-4 EX-11 8 dex11.txt FIRST AMENDED AND RESTATED OPERATING AGREEMENT Exhibit 11 - -------------------------------------------------------------------------------- BERKADIA LLC, a Delaware Limited Liability Company FIRST AMENDED AND RESTATED OPERATING AGREEMENT August 21, 2001 - -------------------------------------------------------------------------------- FIRST AMENDED AND RESTATED OPERATING AGREEMENT OF BERKADIA LLC This FIRST AMENDED AND RESTATED OPERATING AGREEMENT is entered into by and among BHF Berkadia Member Inc., a Delaware corporation ("B-Sub"), WMAC ----- Investors, Inc., a Delaware corporation ("L-Sub"), and Berkadia Management LLC, ----- a Delaware limited liability company ("Berkadia-Management"), as the sole ------------------- Members of the Company. This Agreement shall be effective as of February 26, 2001. RECITALS A. Berkshire Hathaway Inc., a Delaware corporation (the "Original Berkshire ------------------ Member"), and Leucadia National Corporation, a New York corporation (the - ------ "Original Leucadia Member"), entered into that certain Operating Agreement of - ------------------------- Berkadia LLC (the "Original Agreement"), effective as of February 26, 2001. ------------------ B. The Original Leucadia Member assigned its interests in the Company to WMAC Investment Corporation, a Wisconsin corporation ("WMAC"), effective as of ---- February 26, 2001. C. The Original Berkshire Member assigned its interests in the Company to BH Finance LLC, a Nebraska limited liability company ("BH Finance"), effective as ---------- of March 2, 2001. D. In order to consolidate management of the business and affairs of the Company through a single entity (i) concurrently herewith (A) WMAC is contributing a portion of its interest in the Company to L-Sub, its wholly owned subsidiary, and (B) BH Finance is contributing a portion of its interest in the Company to B-Sub, its wholly owned subsidiary, and (ii) each of WMAC and BH Finance is simultaneously contributing the remainder of its interest in the Company to Berkadia-Management. E. The parties now desire to amend and restate the Original Agreement to provide for, among other things, (i) the admission of B-Sub, L-Sub and Berkadia- Management as Members of the Company, (ii) the appointment of Berkadia- Management as Manager of the Company, (iii) the consolidation of management of the business and affairs of the Company in the Manager, (iv) the ownership by the Company of the FNV Stock, (v) the allocation of the economic benefits relating to the FNV Stock among the Members, (vi) the exercise of control with respect to the FNV Stock, and (vii) such other matters as are set forth herein, all on the terms and conditions set forth below. SECTION 1 THE COMPANY 1.1 Formation. --------- The Company has been formed as a limited liability company under and pursuant to the provisions of the Act and upon the terms and conditions set forth in this Agreement. The rights and liabilities of the Members shall be as provided under the Act, the Certificate (as defined herein) and this Agreement. 1.2 Name. ---- The name of the Company shall be "Berkadia LLC" and all business of the Company shall be conducted in such name or such other name as is determined by the Manager. 1.3 Purpose; Powers. --------------- The purposes of the Company are: (a) to seek to obtain approximately $6 billion principal amount of loans or debt financing to fund the Company's activities and to obtain such debt financing on acceptable terms and conditions (the "Outside Financing"); to ----------------- negotiate, execute and deliver such loan or credit agreements, notes, security agreements, pledge agreements, certificates, and other agreements, documents and/or instruments as are necessary or desirable in connection with the Outside Financing (the "Outside Financing Documents"); to amend, modify, restate, waive, --------------------------- or enforce any terms and conditions of the Outside Financing Documents; and to repay, prepay, refinance, extend, renew, redeem, substitute and/or replace the Outside Financing from time to time; (b) to negotiate, execute, deliver and accept the credit agreement contemplated by the commitment letter dated February 26, 2001 by and among the Company, the Original Berkshire Member, the Original Leucadia Member, FCC and FNV (as amended and supplemented, the "Commitment") relating to a loan to FCC on ---------- a senior secured basis (the "Senior Loan"); to negotiate, execute, ----------- deliver and accept notes, security agreements, pledge agreements, guarantees, certificates and other agreements, documents and/or instruments as are necessary or desirable in connection with the Senior Loan (including the credit agreement, the "Senior Loan Documents"); to utilize the proceeds of the Outside Financing --------------------- or, if not obtained, capital contributed by the Members to fund the Senior Loan; to hold collateral, assets, securities, instruments, contracts, rights and other property of FCC, FNV, Affiliates of FCC or FNV or other persons or entities (the "Collateral") as security for, or in full or partial fulfillment of, the ---------- obligations of any party to the Senior Loan Documents; to amend, modify, restate, waive or enforce any terms and conditions of the Senior Loan Documents; to acquire title to or possession of, hold, transfer, sell or dispose of Collateral and other property pursuant to the terms of the Senior Loan Documents; (c) to participate in the formulation and implementation of a chapter 11 plan for FNV and its subsidiaries; 2 (d) to make such additional investments and engage in such additional investment activities as the Manager may determine; and (e) to engage in any and all activities related or incidental to the foregoing purposes. (The activities described in clauses (a) through (e) above shall be referred to as the "Business.") -------- The Company shall have the power to do any and all acts necessary, appropriate, proper, advisable, incidental or convenient to or in furtherance of such purposes. 1.4 Principal Place of Business. --------------------------- The principal place of business of the Company shall be at 1440 Kiewit Plaza, Omaha, Nebraska 68131 or such other location within or without the State of Delaware as the Manager may determine. 1.5 Term. ---- The term of the Company commenced on February 26, 2001 (the "Formation --------- Date"), the date the certificate of formation of the Company (as such - ---- certificate may be amended, modified, supplemented or restated from time to time, the "Certificate") was filed in the office of the Secretary of State of ----------- the State of Delaware in accordance with the Act, and shall continue until the winding up and liquidation of the Company pursuant to Section 10 hereof. 1.6 Filings; Agent for Service of Process. ------------------------------------- (a) The Certificate has been filed in the office of the Secretary of State of the State of Delaware in accordance with the Act. The Manager shall take any and all other actions reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of the State of Delaware, including the preparation and filing of such amendments to the Certificate and such other assumed name certificates, documents, instruments and publications as may be required by law. (b) The Manager shall execute and cause to be filed original or amended certificates and shall take any and all other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company or similar type of entity under the laws of any other jurisdictions in which the Company engages in business. (c) As of the Effective Date, the name and address of the Company's designated agent and registered office for service of process on the Company in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808. 1.7 Definitions. ----------- (a) Capitalized words and phrases used in this Agreement have the following meanings: 3 "Act" means the Delaware Limited Liability Company Act, 6 Del. C. (S)18- 101, et seq., as amended from time to time (or any corresponding provisions of ------- succeeding law). "Additional Capital Contributions" means, with respect to each Member, the Capital Contributions, if any, made by such Member pursuant to Section 2.4 hereof. "Adjusted Capital Account Deficit" means, with respect to any Member, the deficit balance, if any, in such Member's Capital Account as of the end of the relevant Allocation Year, after giving effect to the following adjustments: (i) Credit to such Capital Account any amounts which such Member is deemed to be obligated to restore pursuant to Section 1.704-1(b)(2)(ii)(c) or the penultimate sentences in Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and (ii) Debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704- - - - - 1(b)(2)(ii)(d)(6) of the Regulations. - - The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations - and shall be interpreted consistently therewith. "Affiliate" means, with respect to any Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person. "Affiliated Member" has the meaning set forth in Section 9.2 of this Agreement. "Agreement" means this First Amended and Restated Operating Agreement of Berkadia LLC, including any appendix attached hereto, as amended from time to time. Words such as "herein," "hereinafter," "hereof," "hereto" and "hereunder" refer to this Agreement as a whole, unless the context otherwise requires. "Allocation Year" means (i) the period that commenced on the Formation Date and ends on December 31, 2001, (ii) any subsequent twelve (12) month period commencing on January 1 and ending on December 31 or (iii) any portion of the period described in clauses (i) or (ii) for which the Company is required to allocate Profits, Losses and other items of Company income, gain, loss or deduction pursuant to Section 3 hereof and Appendix B hereto. "Available Cash" means the amount of cash that the Manager deems available for distribution, taking into account all debts, liabilities, and obligations of the Company then due or soon to come due, including, without limitation, payments of principal and interest on, and fees and expenses with respect to, the Outside Financing, and working capital and other amounts and reserves that the Manager deems necessary or advisable in connection with the operation of the Company's Business and the payment of principal and interest on, and fees and expenses with respect to, the Outside Financing; provided, however, that -------- ------- Available Cash shall be determined without regard to the Finova Fees or the Stock Proceeds. "Berkadia-Management" has the meaning set forth in the initial paragraph of this Agreement. 4 "BH Finance" has the meaning set forth in the Recitals to this Agreement. "B-Sub" has the meaning set forth in the Recitals to this Agreement. "Capital Account" means, with respect to any Member, the Capital Account maintained for such Member in accordance with the following provisions: (i) To each Member's Capital Account there shall be credited (A) such Member's Capital Contributions actually (or deemed) made, (B) such Member's distributive share of Profits and any items in the nature of income or gain which are specially allocated pursuant to Section 3 hereof or Paragraph 1, 2 or 3 of Appendix B hereto, and (C) the amount of any Company liabilities assumed by such Member or which are secured by any property distributed to such Member; (ii) To each Member's Capital Account there shall be debited (A) the amount of money and the Gross Asset Value of any property distributed (or deemed distributed) to such Member pursuant to Section 2.3(d), 4, 5.4 or 10 hereof, (B) such Member's distributive share of Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 3 hereof or Paragraph 1, 2 or 3 of Appendix B hereto, and (C) the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company; and (iii) In the event an Interest is Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the Interest. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations. "Capital Contributions" means, with respect to any Member, the amount of money and the initial Gross Asset Value of any property (other than money) contributed or required to be contributed to the Company by such Member pursuant to Section 2, Section 10.2 or Section 12.2 hereof, including Required Capital Contributions and Additional Capital Contributions. "Certificate" has the meaning set forth in Section 1.5 of this Agreement. "Certificate of Cancellation" means a certificate filed in accordance with Section 18-203 of the Act. "Code" means the United States Internal Revenue Code of 1986, as amended from time to time. "Commitment" has the meaning set forth in Section 1.3(b) of this Agreement. "Company" means the limited liability company formed pursuant to the Certificate and continued pursuant to this Agreement. 5 "Company Minimum Gain" has the same meaning as the term "partnership minimum gain" in Section 1.704-2(b)(2) and 1.704-2(d) of the Regulations. "Covered Losses" means all losses, liabilities, expenses or damages (including reasonable attorneys' fees and expenses) paid to any Third Party Claimant for claims or legal actions arising out of the Senior Loan or the Management Agreement or the performance of responsibilities, or taking of actions or decisions pursuant to either, but shall not include claims or actions to collect or enforce the Outside Financing or any other contractual obligation of the Company. "Debt Percentage" means, with respect to any Member, such Member's Debt Percentage as set forth in Appendix A hereto. "Depreciation" means, for each Allocation Year, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Allocation Year, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Allocation Year, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for such Allocation Year bears to such beginning adjusted tax basis; provided, -------- however, that if the adjusted basis for federal income tax purposes of an asset - ------- at the beginning of such Allocation Year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Manager. "Effective Date" means the date hereof. "FCC" means Finova Capital Corporation. "Fee Percentage" means, with respect to any Member, such Member's Fee Percentage as set forth in Appendix A hereto. "Finova Fees" means the fees paid by FCC or FNV to the Company in connection with the establishment of the Commitment, the origination or funding of the Senior Loan and/or the termination of the Commitment, pursuant to the terms of the Commitment or the Senior Loan Documents, including, without limitation, any commitment fee, funding fee, origination fee, and termination fee, as well as any amounts derived by the Company therefrom, but shall not include any Reimbursement Fees as defined in the Commitment. "Fiscal Year" means (i) the period that commenced on the Formation Date and ends on December 31, 2001, (ii) any subsequent twelve-month period commencing on January 1 and ending on December 31 and (iii) the period commencing on the immediately preceding January 1 and ending on the date on which all property is distributed to the Members pursuant to Section 10 hereof. "FNV" means The Finova Group Inc. "FNV Stock" has the meaning set forth in Section 11.2 of this Agreement. "Formation Date" has the meaning set forth in Section 1.5 of this Agreement. 6 "Gross Asset Value" means with respect to any asset, the asset's adjusted basis for federal income tax purposes, except as follows: (i) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset at the time of contribution, as determined by the Manager and the contributing Member; (ii) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values (taking Code Section 7701(g) into account), as determined by the Manager as of the following times: (A) the acquisition of an additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution; (B) ---------- the distribution by the Company to a Member of more than a de minimis amount ---------- of Company property as consideration for an interest in the Company; and (C) the liquidation of the Company within the meaning of Regulations Section 1.704- 1(b)(2)(ii)(g); provided that an adjustment at the times described in clauses -------- (A) and (B) of this paragraph shall be made only if the Manager determines that such adjustment is necessary to reflect the relative economic interests of the Members in the Company; (iii) The Gross Asset Value of any item of Company assets distributed to any Member shall be adjusted to equal the gross fair market value (taking Code Section 7701(g) into account) of such asset on the date of distribution as determined by the Manager; and (iv) The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph - (vi) of the definition of "Profits" and "Losses" or Paragraph 1(g) of Appendix B hereto; provided, however, that Gross Asset Values shall not be adjusted -------- ------- pursuant to this subparagraph (iv) to the extent that an adjustment pursuant to subparagraph (ii) is required in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv). If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph (ii) or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset, for purposes of computing Profits and Losses. "Gross Profit" shall mean the sum of (a) the amounts distributed to a Member pursuant to Section 4.1 or Section 10.2 of this Agreement, (b) in the case of L-Sub, the fees paid to L-Sub or any of its Affiliates pursuant to the Management Agreement (net of amounts, if any, paid over to B-Sub or its Affiliates pursuant to Section 11.1 of the Operating Agreement of Berkadia- Management), and (c) in the case of B-Sub, the amounts, if any, paid over to B- Sub or its Affiliates pursuant to Section 11.1 of the Operating Agreement of Berkadia-Management, in each case, from the Formation Date to the date of the Covered Loss. "Interest" means an ownership interest in the Company, including any and all benefits to which the holder of such Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. 7 "Losses" has the meaning set forth in the definition of "Profits" and "Losses." "L-Sub" has the meaning set forth in the Recitals to this Agreement. "Management Agreement" means that certain Second Amended and Restated Management Services Agreement by and among the Original Leucadia Member, Leucadia International Corporation and FNV, dated as of June 10, 2001 (and prior to June 10, 2001, the predecessor Management Services Agreement dated February 26, 2001, and the First Amended and Restated Management Services Agreement dated April 3, 2001), or any similar agreement. "Manager" means Berkadia-Management, or any Person (whether or not a Member) appointed as successor manager of the Company in accordance with Section 5.9 hereof. "Member" means any Person (i) who is referred to as such on Appendix A hereto, or who has become a substituted Member pursuant to the terms of this Agreement and (ii) who has not ceased to be a Member. "Member Nonrecourse Debt" has the same meaning as the term "partner nonrecourse debt" in Section 1.704-2(b)(4) of the Regulations. "Member Nonrecourse Debt Minimum Gain" means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of the Regulations. "Member Nonrecourse Deductions" has the same meaning as the term "partner nonrecourse deductions" in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations. "Nonrecourse Deductions" has the meaning set forth in Section 1.704-2(b)(1) of the Regulations. "Nonrecourse Liability" has the meaning set forth in Section 1.704-2(b)(3) of the Regulations. "Original Agreement" has the meaning set forth in the Recitals to this Agreement. "Original Berkshire Member" has the meaning set forth in the Recitals to this Agreement. "Original Leucadia Member" has the meaning set forth in the Recitals to this Agreement. "Outside Financing" has the meaning set forth in Section 1.3(a) of this Agreement. "Outside Financing Documents" has the meaning set forth in Section 1.3(a) of this Agreement. "Person" means any individual, partnership (whether general or limited), limited liability company, corporation, trust, estate, association, nominee or other entity. 8 "Profits" and "Losses" mean, for each Allocation Year, an amount equal to the Company's taxable income or loss for such Allocation Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication): (i) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition of "Profits" and "Losses" shall be added to such taxable income or loss; (ii) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition of "Profits" and "Losses" shall be subtracted from such taxable income or loss; (iii) In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the asset) or an item of loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; (iv) Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value; (v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Allocation Year, computed in accordance with the definition of Depreciation; (vi) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in - - determining Capital Accounts as a result of a distribution other than in liquidation of a Member's Interest, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses; and (vii) Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 3.1(a) hereof or Paragraph 1, 2 or 3 of Appendix B hereto shall not be taken into account in computing Profits or Losses. The amounts of the items of Company income, gain, loss or deduction available to be specially allocated pursuant to Section 3.1(a) hereof and Paragraphs 1, 2 or 3 of Appendix B hereto shall 9 be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi) above. "Proportionate Share" for any Member shall mean the product of (x) the quotient obtained by dividing (I) the Gross Profit of such Member by (II) the aggregate Gross Profit of all Members multiplied by (y) the amount of the Covered Loss. "Regulations" means the Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations are amended from time to time. "Required Capital Contributions" means, with respect to each Member, the Capital Contributions, if any, made or required to be made by such Member pursuant to Section 2.3 or 12.2 hereof. "Senior Loan" has the meaning set forth in Section 1.3(b) of this Agreement. "Senior Loan Documents" has the meaning set forth in Section 1.3(b) of this Agreement. "Stock Percentage" means, with respect to any Member, such Member's Stock Percentage as set forth in Appendix A hereto. "Stock Proceeds" means any dividends, distributions, proceeds received upon disposition, or other amounts received by the Company for or with respect to the FNV Stock, as well as any amounts derived by the Company therefrom. "Third Party Claimant" means a person or entity other than the Company, a Member, FCC, FNV, any lender or other party to any of the Outside Financing Documents, or any Affiliate of any of the foregoing; provided, however, that a Third Party Claimant shall include the shareholders or debtholders of FNV (other than a Member or an Affiliate of a Member) whether making a claim directly or in a derivative form of action. "Transfer" means, as a noun, any voluntary or involuntary transfer, sale, pledge or hypothecation or other disposition and, as a verb, voluntarily or involuntarily to transfer, sell, pledge or hypothecate or otherwise dispose of. "WMAC" has the meaning set forth in the Recitals to this Agreement. SECTION 2 FINANCING; CAPITAL CONTRIBUTIONS 2.1 Initial Capital Contributions. ----------------------------- The Members have not made, and shall not be required to make, any initial Capital Contributions to the Company. 2.2 Outside Financing; Guarantees. ------------------------------ (a) Except as otherwise agreed by the Members, the final terms of the Outside Financing shall include (i) a primary guarantee by the Original Berkshire Member of 90 percent 10 of the Company's obligations under such Outside Financing, and (ii) a primary guarantee by the Original Leucadia Member of the remaining 10 percent of the Company's obligations under such Outside Financing, as well as a secondary guaranty by the Original Berkshire Member of such remaining 10 percent of the Company's obligations under such Outside Financing, in the case of each of clause (i) and (ii), on standard terms and conditions. (b) All other matters relating to the Outside Financing, including, without limitation, the timing, terms and conditions thereof, as well as whether to consummate the Outside Financing and all matters related to the administration of the Outside Financing, shall be determined by the Manager. 2.3 Required Capital Contributions. ------------------------------- (a) If the Outside Financing cannot be obtained on terms and conditions acceptable to the Manager, but the Company is required to advance funds to FCC pursuant to the terms of the Commitment, then on or before the date such funds are required to be advanced, Berkadia-Management shall fund to the Company an amount of Capital Contributions that, when combined with the Outside Financing actually obtained, is sufficient to satisfy the Company's obligations under the Commitment. (b) If any payment, including any amount of principal, interest or similar item, or any amount attributable to indemnification obligations of the Company under the Outside Financing Documents, is due to be paid to the lenders who have provided the Outside Financing and the Company does not have sufficient funds to make such payment (apart from Finova Fees, Stock Proceeds or the FNV Stock), then on or before the date such funds are required to be paid, Berkadia- Management shall fund to the Company an amount of Capital Contributions that is sufficient to pay the amounts required to be paid (without drawing upon such Finova Fees, Stock Proceeds or the FNV Stock, which assets shall not be applied by the Company to satisfy such Company obligations, and shall retain their status as such items for all purposes of this Agreement, including for purposes of applying Section 4.1 hereof). Consistent with the preceding sentence, and pursuant to Section 18-303(b) of the Act, Berkadia-Management hereby agrees to be liable for all of the Company's obligations under the Outside Financing, and no other Member shall bear any responsibility or liability for any portion of such Company obligations. (c) If the Company incurs costs or expenses, other than those set forth in Section 2.3(a) or (b) above, and does not have sufficient funds to pay such expenses (apart from Finova Fees, Stock Proceeds or the FNV Stock), upon demand by the Company or by either Member, the Members shall promptly make Capital Contributions sufficient to pay such costs and expenses (without drawing upon such Finova Fees, Stock Proceeds or the FNV Stock, which assets shall not be applied by the Company to satisfy such Company expenses, and shall retain their status as such items for all purposes of this Agreement, including for purposes of applying Section 4.1 hereof) in accordance with the following: (i) with respect to costs and expenses incurred in the operation of the Company's Business from the Formation Date through the date of, and after giving effect to, the funding of the Senior Loan, the Members shall make such Capital Contributions in accordance 11 with their Fee Percentages; provided, however, that with respect to any -------- ------- origination, commitment or similar up-front fees payable in connection with the Outside Financing, the Members shall make such Capital Contributions in accordance with their Debt Percentages; (ii) with respect to costs and expenses incurred in the operation of the Company's Business following the date of, and after giving effect to, the funding of the Senior Loan, the Members shall make such Capital Contributions in accordance with their Debt Percentages; provided, however, that -------- ------- the Members shall make such Capital Contributions in accordance with their Stock Percentages with respect to costs and expenses attributable to the ownership of the FNV Stock; (iii) the Original Berkshire Member agrees to contribute (or cause to be contributed) to B-Sub, and the Original Leucadia Member agrees to contribute (or cause to be contributed) to L-Sub, an amount sufficient in each case for such Member to fund its Required Capital Contributions as and when required under this Section 2.3(c); and (iv) notwithstanding (i) - (iii) above, Section 12.2 shall control Capital Contributions required to fund costs and expenses that constitute Covered Losses. (d) If B-Sub or L-Sub (the "defaulting Member") fails to fund its Required Capital Contributions as and when required, whether pursuant to this Section 2.3, Section 12.2, or otherwise, the non-defaulting Member (other than Berkadia-Management) shall have a direct claim against the defaulting Member for breach of contract hereunder, and the non-defaulting Member and the Company (at the sole direction of the non-defaulting Member) shall have all remedies available to either of them in law or equity with respect to such failure by the defaulting Member. Without limiting the foregoing, (i) interest shall accrue on a defaulting Member's unfunded Capital Contributions from the date required to be made at a per annum rate equal to the "prime rate" (as specified in the Wall Street Journal or similar national publication) plus two percentage points ("prime plus two"), compounded annually, (ii) the non-defaulting Member shall be entitled to contribute to the Company the amount of such unfunded Capital Contributions, and (iii) to the extent the non-defaulting Member has funded in place of the defaulting Member, amounts otherwise distributable to the defaulting Member under this Agreement, whether pursuant to Section 4.1, upon liquidation of the Company pursuant to Section 10.2, or otherwise, shall be distributed by the Company to the non-defaulting Member, but deemed for all purposes of this Agreement as distributed to the defaulting Member and immediately recontributed to the Company as Required Capital Contributions, until such time as the non-defaulting Member has received from the Company on account of such distributions a return of the amount, if any, funded in place of the defaulting Member, plus interest thereon from the date funded at prime plus two, compounded annually. To the extent the non-defaulting Member has not funded in place of the defaulting Member, amounts otherwise distributable to the defaulting Member shall be retained by the Company, but deemed for all purposes of this Agreement as distributed to the defaulting Member and immediately recontributed to the Company as Required Capital Contributions, until such time as the Company has retained an amount of such distributions equal to the amount not funded by the defaulting Member (or by the non-defaulting Member pursuant to the immediately preceding sentence), plus interest thereon from the date required to be made at prime plus two, compounded annually. A defaulting Member shall remain in default hereunder until it has contributed, or is deemed to have 12 contributed, to the Company, all amounts required to be contributed under this Section 2.3(d), including interest. Beginning on the date that is 10 days after the receipt of written notice from the Company or the non-defaulting Member that the recipient Member is in default hereunder, the defaulting Member shall not have any voting, consent or appointment rights as a Member, or any other rights to direct the Company in any manner, during the continuation of such default. 2.4 Additional Capital Contributions. -------------------------------- The Members may make additional Capital Contributions (in addition to those required by Section 2.3 hereof) as approved by the Manager, in which event the Company shall adjust the Members' Debt Percentages, Fee Percentages and/or Stock Percentages in the manner reasonably determined by the Manager. SECTION 3 ALLOCATIONS 3.1 Profits and Losses. ------------------ (a) After giving effect to the special allocations set forth in Paragraphs 1, 2 and 3 of Appendix B hereto (i) income constituting original issue discount with respect to the Senior Loan for any Allocation Year shall be allocated in its entirety to Berkadia-Management and (ii) each Member shall be specially allocated items of Company income and gain for such Allocation Year in an amount equal to such Member's share of income or gain attributable to Finova Fees or Stock Proceeds, determined in accordance with such Member's Fee Percentage and Stock Percentage, respectively. (b) After giving effect to the special allocations set forth in Paragraphs 1, 2 and 3 of Appendix B hereto, and the additional special allocations set forth in Section 3.1(a) above, the Company shall allocate Profits, Losses and any items of Company income, gain, loss or deduction for any Allocation Year to the Members as follows: (i) Losses and any items of Company expense or deduction for such Allocation Year shall be allocated (x) first, to those Members with positive Capital Account balances in proportion to such positive Capital Account balances, until the Capital Accounts of such Members have been reduced to zero, and (y) thereafter, 100 percent to Berkadia-Management. (ii) Profits and any items of Company income or gain for such Allocation Year shall be allocated (x) first, to reverse any Losses (or items thereof) allocated to the Members pursuant to Section 3.1(b)(i) in the reverse of the order in which they were previously allocated, and (y) thereafter, to the Members pro rata in accordance with their Debt Percentages. 3.2 Additional Allocations. ---------------------- Additional provisions respecting allocations are set forth in Appendix B hereto and are incorporated by reference herein. 13 SECTION 4 DISTRIBUTIONS 4.1 Distributions. ------------- Subject to Section 2.3(d) hereof: (a) The Finova Fees shall be distributed to the Members at such times as the Manager shall determine in proportion to their Fee Percentages; (b) Any Stock Proceeds shall be distributed to the Members at such times as the Manager shall determine in proportion to their Stock Percentages; and (c) Available Cash, if any, shall be distributed to the Members at such times as the Manager shall determine in proportion to their Debt Percentages. 4.2 Return of Distributions. ----------------------- Except as required by law, no Member shall be required to restore to the Company any funds properly distributed to it pursuant to this Section 4 or Section 10 hereof; provided, however, that nothing herein shall affect the -------- ------- obligation to make any Required Capital Contributions. SECTION 5 MANAGEMENT 5.1 Management by the Manager. ------------------------- (a) Except as otherwise provided in this Agreement, the Manager shall act as "manager" of the Company within the meaning of (S)18-101(10) of the Act. (b) All powers to control and manage the Business and affairs of the Company shall be exclusively vested in the Manager and the Manager may exercise all powers of the Company and do all such lawful acts as are not by statute, the Certificate or this Agreement prohibited, and in so doing shall have the right and authority to take all actions which the Manager deems necessary, useful or appropriate for the management and conduct of the Business. (c) Except as otherwise provided in this Agreement or as required by the Act, no matter relating to the management of the Business and affairs of the Company shall require the consent of any Member of the Company (other than the Manager, if the Manager is a Member). (d) The Manager shall have the power to delegate authority to such officers, employees, agents and representatives of the Company as it may from time to time deem appropriate. Any delegation of authority to take any action must be approved in the same manner as would be required to approve such action directly. 14 5.2 Meetings of the Members; Approval; Expedited Decision. ----------------------------------------------------- (a) The Members shall meet at such times as they may agree. (b) For all matters under this Agreement or under the Act for which the consent, approval or affirmative vote of a Member is required, such Member's consent, approval or affirmative vote may be given (i) at a physical meeting of the Members or (ii) at a meeting held by means through which all persons participating in the meeting can hear and respond to each other, provided that a summary of such other meeting is promptly delivered to the Members in writing, followed, in the case of a facsimile transmission, by hard copy sent by recognized overnight delivery service or U.S. mail, postage and charges prepaid, addressed as described in Section 12.1 hereof, or to such other address as a Member may from time to time specify by notice to the other Member. (c) Notwithstanding anything to the contrary in this Section 5.2, the Members may take any action without a meeting that may be taken by the Members under this Agreement if such action is approved by the written consent of all Members. (d) In addition to the methods set forth above, a Member may solicit the expedited decision of the other Members with respect to any matter under this Agreement by having its Designated Representative contact, by telephone, facsimile or other agreed means, the other Members' Designated Representatives. "Designated Representative" shall mean, in the case of each Member, such ------------------------- authorized representative as identified by such Member in a written notice to the other Members. Upon receipt of a request for an expedited decision by a Member's Designated Representative, a recipient Member's Designated Representative shall use reasonable efforts to deliver a written decision, consent, approval, disapproval or other relevant response to the request within 48 hours following receipt from the requesting Member (or otherwise) of all available information reasonably required to reach such a decision. The failure of a Member's Designated Representative to timely respond in writing to such a request shall be treated as such Member's disapproval or decision not to consent with respect to the matter involved. Any expedited decision reached in accordance with this paragraph shall be valid only if the relevant communication is delivered in writing, followed, in the case of a facsimile transmission, by hard copy sent by recognized overnight delivery service or U.S. mail, postage and charges prepaid, addressed as described in Section 12.1 hereof, or to such other address as a Member may from time to time specify by notice to the other Members. 5.3 Duties and Obligations of Manager and Other Members. --------------------------------------------------- (a) The Manager shall cause the Company to conduct its Business and operations separate and apart from that of any Member or its Affiliates, including, without limitation, (i) segregating Company assets and not allowing funds or other assets of the Company to be commingled with the funds or other assets of, held by, or registered in the name of, any Member or its Affiliates, (ii) maintaining books and financial records of the Company separate from the books and financial records of any Member or its Affiliates, and observing all Company procedures and formalities, including, without limitation, maintaining minutes of Company meetings and acting on behalf of the Company only pursuant to due authorization, (iii) causing the Company to pay its liabilities from assets of the Company, and (iv) causing the 15 Company to conduct its dealings with third parties in its own name and as a separate and independent entity. (b) The Manager and the Members shall take all actions which may be necessary or appropriate (i) for the continuation of the Company's valid existence as a limited liability company under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Members or to enable the Company to conduct the business in which it is engaged and (ii) for the accomplishment of the Company's purposes, in accordance with the provisions of this Agreement and applicable laws and regulations. (c) Neither the Manager, nor any Member shall have any duties, fiduciary or otherwise, to the Company or the other Members, other than the contractual obligations set forth herein. 5.4 Reimbursements. -------------- (a) Except as otherwise specified in this Agreement, and subject to reimbursement by FNV or FCC pursuant to the Commitment and the Annexes thereto, each Member shall pay its own costs and expenses incurred and paid by such person in the conduct of the Company's Business, including, without limitation, any and all costs and expenses incurred in negotiating and documenting the Commitment and the Management Agreement, and participating in the formulation of the chapter 11 plan for FNV and its subsidiaries. Without limiting the generality of the foregoing, neither the Company nor the Original Berkshire Member nor any Affiliate thereof shall be responsible for the costs and expenses resulting from the performance by the Original Leucadia Member or any Affiliate thereof of its obligations under the Management Agreement. (b) Notwithstanding the foregoing, the Members intend that all costs and expenses incurred after the Formation Date in negotiating and documenting the Outside Financing and the Senior Loan, and any other expenses incurred in the operation of the Company's Business (other than Covered Losses) shall be borne by the Company; provided, however, that direct costs and expenses of a -------- ------- Member, such as salaries or benefits of its employees or travel expenses, shall not be treated as expenses of, or paid by, the Company, and such Member shall not be entitled hereunder to any reimbursement with respect thereto. (c) To the extent that any costs or expenses of the Members or the Company are reimbursed to the Company by FCC or FNV pursuant to the terms of the Commitment, the Senior Loan Documents or otherwise, such amounts shall promptly be distributed to the Members who (or whose predecessors) bore such costs or expenses (if costs or expenses paid by a Member or its predecessors are being reimbursed), or to the Members pro rata in accordance with the percentage of such cost or expense paid by the Members in accordance with Section 2.3(c) (if costs or expenses paid by the Company are being reimbursed). 5.5 Manager Control of Commitment and Senior Loan. --------------------------------------------- Notwithstanding any other provision of this Agreement, and without limiting the generality of Section 5.1, decisions relating to any act taken or not taken by the Company with 16 respect to the Commitment or the Senior Loan, including, without limitation, any decisions relating to the documentation or administration of such Senior Loan or arising out of any default, decisions relating to enforcement or to the waiver of any covenants or requirements with respect to the Commitment or the Senior Loan, and the control of any contest related thereto, shall be made by the Manager on behalf of the Company in its sole and absolute discretion. The Company shall promptly reimburse the Manager for its reasonable costs and expenses, including attorneys fees, incurred in connection with any investigation or dispute arising out of any such occurrence. 5.6 Withdrawal. ---------- Except as otherwise provided in Sections 4, 5.4(c) and 10 hereof, no Member shall demand or receive a return on or of its Capital Contributions or withdraw or resign from the Company without the consent of the Manager. Under circumstances requiring a return of any Capital Contributions, no Member has the right to receive property other than cash except as may be specifically provided herein. 5.7 Compensation. ------------ Neither the Manager, nor any Member shall receive any interest, salary or drawing with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Company, or otherwise, in its capacity as Manager or as a Member, except as otherwise provided in this Agreement. 5.8 Member Liability. ---------------- Subject to Section 2.3(b), neither the Manager, nor any Member shall be liable to any third party under a judgment, decree or order of a court, or in any other manner, for the debts or any other obligations or liabilities of the Company. Except as required by applicable law or this Agreement, a Member shall be liable only to make its Capital Contributions and shall not be required to restore a deficit balance in its Capital Account or to lend any funds to the Company or, apart from its Capital Contributions, to make any additional contributions, assessments or payments to the Company. 5.9 Removal and Replacement of Manager. ----------------------------------- The Manager may be removed as Manager of the Company, and replaced with a successor Manager (which successor need not be a Member of the Company) only upon the written election of all Members (other than the Manager, if the Manager is a Member). If the Manager is a Member, then it shall continue as a Member of the Company notwithstanding its removal and replacement as Manager of the Company. 17 SECTION 6 REPRESENTATIONS AND WARRANTIES 6.1 In General. ---------- As of the date hereof, each Member hereby makes each of the representations and warranties applicable to such Member as set forth in Section 6.2 hereof, and such warranties and representations shall survive the execution of this Agreement. 6.2 Representations and Warranties. ------------------------------ Each Member hereby represents and warrants that: (a) Due Incorporation or Formation; Authorization of Agreement. Such ---------------------------------------------------------- Member is a corporation or limited liability company duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation or formation and has the company power and authority to own its property and carry on its business as owned and carried on at the date hereof and as contemplated hereby. Such Member is duly licensed or qualified to do business and in good standing in each of the jurisdictions in which the failure to be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder. Such Member has the company power and authority to execute and deliver this Agreement and to perform its obligations hereunder and the execution, delivery, and performance of this Agreement has been duly authorized by all necessary company action. This Agreement constitutes the legal, valid, and binding obligation of such Member. (b) No Conflict with Restrictions; No Default. Neither the execution, ----------------------------------------- delivery, and performance of this Agreement, nor the consummation by such Member of the transactions contemplated hereby (i) will conflict with, violate, or result in a breach of any of the terms, conditions, or provisions of any law, regulation, order, writ, injunction, decree, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator, applicable to such Member, (ii) will conflict with, violate, result in a breach of, or constitute a default under any of the terms, conditions, or provisions of the articles of incorporation or bylaws of such Member, or of any material agreement or instrument to which such Member is a party or by which such Member is or may be bound or to which any of its material properties or assets is subject, (iii) will conflict with, violate, result in a breach of, constitute a default under (whether with notice or lapse of time or both), accelerate or permit the acceleration of the performance required by, give to others any material interests or rights, or require any consent, authorization, or approval under any indenture, mortgage, lease agreement, or instrument to which such Member is a party or by which such Member is or may be bound, or (iv) will result in the creation or imposition of any lien upon any of the material properties or assets of such Member. (c) Governmental Authorizations. Any registration, declaration, or --------------------------- filing with, or consent, approval, license, permit, or other authorization or order by, any governmental or regulatory authority, domestic or foreign, that is required in connection with the valid execution, delivery, acceptance and performance by such Member under this Agreement, or the 18 consummation by such Member of any transaction contemplated hereby has been completed, made, or obtained on or before the Effective Date. (d) Litigation. There are no actions, suits, proceedings, or ---------- investigations pending or, to the knowledge of such Member threatened against or affecting such Member or any of its wholly-owned Affiliates or any of their properties, assets, or businesses in any court or before or by any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation could lead to any action, suit, or proceeding, which if adversely determined could) reasonably be expected to materially impair such Member's ability to perform its obligations under this Agreement, and such Member has not received any currently effective notice of any default, and such Member is not in default, under any applicable order, writ, injunction, decree, permit, determination, or award of any court, any governmental department, board, agency, or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected to materially impair such Member's ability to perform its obligations under this Agreement. SECTION 7 ACCOUNTING, BOOKS AND RECORDS 7.1 Accounting, Books and Records. ----------------------------- The Company shall keep on site at its principal place of business such books and records relating to the Company and its affairs as it reasonably deems appropriate, and any Member or its designated representative shall have the right to have reasonable access to and inspect and copy the contents of such books or records, subject to compliance by such Member with the safety, security and confidentiality procedures and guidelines of the Company, as such procedures and guidelines may be established from time to time. 7.2 Reports. ------- The Company shall cause to be delivered to each Member such periodic reports and financial statements as may be reasonably requested by a Member from time to time. 7.3 Tax Matters. ----------- Subject to the agreement of all Members, the Tax Matters Member (as defined below) shall make on behalf of the Company any and all elections for federal, state, local, and foreign tax purposes that it determines appropriate, and shall represent the Company and the Members before taxing authorities or courts of competent jurisdiction in tax matters affecting the Company or the Members in their capacities as Members, and file any tax returns and execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind the Members with respect to such tax matters or otherwise affect the rights of the Company and the Members. B-Sub is specifically authorized to act as the "Tax Matters Member" under the Code and in ------------------ any similar capacity under state or local law. 19 SECTION 8 AMENDMENTS 8.1 Amendments. ---------- This Agreement may be amended or modified only by a written instrument signed by each Member. SECTION 9 TRANSFERS 9.1 Restrictions on Transfers. ------------------------- Except as otherwise permitted by this Agreement, no Member shall Transfer all or any portion of its Interest. 9.2 Permitted Transfers. ------------------- Subject to the conditions and restrictions set forth in Section 9.3 hereof, a Member may at any time Transfer all, but not less than all, of its Interest to (a) any other Member or wholly-owned Affiliate of another Member, (b) any wholly-owned Affiliate of the transferor (or of the Original Berkshire Member or the Original Leucadia Member), or (c) any other Person, subject to receipt, in the case of clause (c), of the prior written consent of the other Members in their absolute discretion if the Senior Loan has not then been paid in full (any such Transfer pursuant to clauses (a), (b) or (c) being referred to in this Agreement as a "Permitted Transfer"). Notwithstanding the foregoing, B-Sub or ------------------ L-Sub may transfer less than all of its Interests to one or more wholly-owned Affiliates (or wholly-owned Affiliates of the Original Berkshire Member, in the case of B-Sub, or of the Original Leucadia Member, in the case of L-Sub) (each, an "Affiliated Member"); provided, however, that for purposes hereof, all of a ----------------- -------- ------- Member's Affiliated Members shall be deemed to constitute one and the same Member and any action or consent required hereunder with respect to B-Sub's or L-Sub's Affiliated Members shall be given solely through the action or consent of B-Sub or L-Sub, as agent for all B-Sub or L-Sub Affiliated Members, as applicable. Any distribution or allocation to be made hereunder shall be made as if neither B-Sub nor L-Sub had any Affiliated Members, shall be made as B-Sub or L-Sub directs to one Member as agent for all B-Sub or L-Sub Affiliated Members, as applicable, and thereafter B-Sub or L-Sub, as applicable, shall be responsible for apportioning such distribution among their respective Affiliated Members, if any, according to their respective Interests. A Transfer to an Affiliated Member shall not relieve the transferor of its obligations hereunder. 9.3 Conditions to Permitted Transfers. --------------------------------- A Transfer shall not be treated as a Permitted Transfer under Section 9.2 hereof unless and until the following conditions are satisfied: (a) The transferor and transferee shall execute and deliver to the Company such documents and instruments of conveyance as may be necessary or appropriate in the opinion of counsel to the Company to effect such Transfer. The Company shall be reimbursed 20 by the transferor and/or transferee for all costs and expenses that it reasonably incurs in connection with such Transfer. (b) The transferor and transferee shall furnish the Company with the transferee's taxpayer identification number, sufficient information to determine the transferee's initial tax basis in the Interest transferred, and any other information reasonably necessary to permit the Company to file all required federal and state tax returns and other legally required information statements or returns. Without limiting the generality of the foregoing, the Company shall not be required to make any distribution otherwise provided for in this Agreement with respect to any transferred Interest until it has received such information. (c) The transferee of Interests (other than, with respect to clauses (i) and (ii) below, a transferee that was a Member prior to the Transfer) shall, by written instrument in form and substance reasonably satisfactory to the nontransferring Members (and, in the case of clause (iii) below, the transferor Member), (i) make representations and warranties to the nontransferring Members equivalent to those set forth in Section 6, (ii) accept and adopt the terms and provisions of this Agreement, including, without limitation, this Section 9 and Section 11, and (iii) assume the obligations of the transferor Member under this Agreement with respect to the transferred Interest. (d) The transferor shall not be relieved of its obligations hereunder. 9.4 Prohibited Transfers. -------------------- (a) Any purported Transfer of an Interest that is neither a Permitted Transfer nor a Transfer of less than all of a Member's Interests to one or more Affiliated Members in compliance with Section 9.2, shall be null and void and of no force or effect whatever; provided, however, that if the Company is required -------- ------- by law to recognize a Transfer that is not a Permitted Transfer, the Interest Transferred shall be strictly limited to the transferor's rights to allocations and distributions as provided by this Agreement with respect to the transferred Interest, which allocations and distributions may be applied (without limiting any other legal or equitable rights of the Company) to satisfy any debts, obligations, or liabilities for damages that the transferor or transferee of such Interest may have to the Company, and such transferee shall not become a Member of the Company. (b) In the case of a Transfer or attempted Transfer of an Interest that is neither a Permitted Transfer nor a Transfer of less than all of a Member's Interests to one or more Affiliated Members in compliance with Section 9.2, the parties engaging or attempting to engage in such Transfer shall be liable to indemnify and hold harmless the Company and the other Members from all cost, liability, and damage that any of such indemnified Members may incur (including, without limitation, incremental tax liabilities, lawyers' fees and expenses) as a result of such Transfer or attempted Transfer and efforts to enforce the indemnity granted hereby. 9.5 Rights of Unadmitted Assignees. ------------------------------ A Person who acquires an Interest but who is not admitted as a substituted Member pursuant to Section 9.6 hereof shall be entitled only to allocations and distributions with respect to such Interest in accordance with this Agreement, and shall have no right to any information or 21 accounting of the affairs of the Company, shall not be entitled to inspect the books or records of the Company, and shall not have any of the rights of a Member under the Act or this Agreement. 9.6 Admission of Substituted Members. -------------------------------- Subject to the other provisions of this Section 9, a transferee of an Interest in a Permitted Transfer shall be admitted to the Company as a substituted Member. 9.7 Distributions and Allocations in Respect of Transferred Interest. ---------------------------------------------------------------- If any Interests are Transferred during any Allocation Year in compliance with the provisions of this Section 9, Profits, Losses, each item thereof, and all other items attributable to the Transferred Interest for such Allocation Year shall be divided and allocated between the transferor and the transferee by taking into account their varying Percentage Interests during the Fiscal Year in accordance with Code Section 706(d), using any conventions permitted by law and selected by the Manager. All distributions on or before the date of such Transfer shall be made to the transferor, and all distributions thereafter shall be made to the transferee. SECTION 10 DISSOLUTION AND WINDING UP 10.1 Dissolution Events. ------------------ Except as otherwise unanimously agreed to by the Members, the Company shall dissolve and shall commence winding up and liquidating upon the first to occur of any of the following (each a "Dissolution Event"): ------------------ (a) The unanimous vote of the Members to dissolve, wind up, and liquidate the Company; (b) A judicial determination that an event has occurred that makes it unlawful, impossible or impractical to carry on the Business; (c) The dissolution or liquidation of a Member or the taking of any action by its directors or a majority of its stockholders looking to the dissolution or liquidation of such Member, unless substantially all assets of such Member are transferred or are to be transferred to a wholly-owned Affiliate of such Member (or of the Original Berkshire Member or the Original Leucadia Member); (d) The bankruptcy or insolvency of a Member or the occurrence of any other event which would permit a trustee or receiver to acquire control of the affairs or assets of a Member; or (e) The payment in full of each of the Senior Loan and the Outside Financing, unless waived by all Members. The Members hereby agree that, notwithstanding any provision of the Act, the Company shall not dissolve prior to the occurrence of a Dissolution Event. 22 10.2 Winding Up. ---------- Upon the occurrence of a Dissolution Event, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Members, and no Member shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Company's Business and affairs; provided, that all covenants contained in this Agreement and obligations - -------- provided for in this Agreement shall continue to be fully binding upon the Members until such time as the Company's property has been distributed pursuant to this Section 10.2 and the Certificate has been canceled pursuant to the Act. The Liquidator shall be responsible for overseeing the winding up and dissolution of the Company, which winding up and dissolution shall be completed within one (1) year of the occurrence of the Dissolution Event. The Liquidator shall take full account of the Company's liabilities and property and shall cause the property or the proceeds from the sale thereof, to the extent sufficient therefor, to be applied and distributed, to the maximum extent permitted by law, in the following order: (a) First, to creditors (including Members who are creditors, to the extent otherwise permitted by law) in satisfaction of all of the Company's debts and other liabilities (whether by payment or the making of reasonable provision for payment thereof); and (b) The balance, if any, to the Members in accordance with Section 4.1 hereof, by the end of the taxable year of the Company during which the liquidation of the Company occurs (or, if later, by 90 days after the date of liquidation). Except as provided in the next sentence, if any Member has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for all periods), such Member shall have no obligation to make any contribution to the capital of the Company with respect to such deficit, and such deficit shall not be considered a debt owed to the Company or to any other Person for any purpose whatsoever. Notwithstanding the foregoing, in connection with the liquidation of the Company, and prior to the application and distribution of Company assets pursuant to clauses (a) and (b) above, each Member shall contribute to the Company an amount equal to any portion of its Required Capital Contributions that has not previously been contributed (or deemed contributed), including interest thereon to the extent required by Section 2.3(d). No Member shall receive additional compensation for any services performed pursuant to this Section 10. 10.3 Rights of Members. ----------------- Except as otherwise provided in this Agreement, each Member shall look solely to the Company's property for the return of its Capital Contribution and has no right or power to demand or receive property other than cash from the Company, and if the assets of the Company remaining after payment or discharge of the debts or liabilities of the Company are insufficient to return such Capital Contribution, a Member shall have no recourse against the Company, the Manager or the other Members. 23 10.4 Termination. ----------- Upon completion of the distribution of the Company's property as provided in this Section 10, the Company shall be terminated, and the Liquidator shall cause the filing of the Certificate of Cancellation pursuant to Section 18-203 of the Act and shall take all such other actions as may be necessary to terminate the Company. 10.5 Allocations During Period of Liquidation. ---------------------------------------- During the period commencing on the first day of the Fiscal Year during which a Dissolution Event occurs and ending on the date on which all of the assets of the Company have been distributed to the Members pursuant to Section 10.2 hereof (the "Liquidation Period"), the Members shall continue to share ------------------ Profits, Losses, and other items of Company income, gain, loss or deduction in the manner provided in Section 3 hereof and Appendix B hereto. 10.6 The Liquidator. -------------- (a) The "Liquidator" shall mean the Manager or a Person appointed by ---------- the Manager to oversee the liquidation of the Company. The Liquidator may be an officer, a Member or any other Person. (b) The Company is authorized to pay a reasonable fee to the Liquidator for its services performed pursuant to this Section 10 and to reimburse the Liquidator for its reasonable costs and expenses incurred in performing those services. (c) The Company shall indemnify, save harmless, and pay all judgments and claims against such Liquidator or any officers, directors, agents or employees of the Liquidator relating to any liability or damage incurred by reason of any act performed or omitted to be performed by the Liquidator, or any officers, directors, agents or employees of the Liquidator in connection with the liquidation of the Company, including reasonable attorneys' fees incurred by the Liquidator, officer, director, agent or employee in connection with the defense of any action based on any such act or omission, which attorneys' fees may be paid as incurred, except to the extent such liability or damage is caused by the fraud, gross negligence, intentional misconduct of, or a knowing violation of the laws by the Liquidator which was material to the cause of action. 10.7 Form of Liquidating Distributions. --------------------------------- For purposes of making distributions required by Section 10.2 hereof, the Liquidator may determine whether to distribute all or any portion of the property in-kind or to sell all or any portion of the property and distribute the proceeds therefrom; provided, however, that no Member shall be required to -------- ------- accept property in-kind in lieu of cash if cash is being delivered to another Member; provided, further, that the FNV Stock, if any, shall be distributed in- -------- ------- kind in accordance with the Members' Stock Percentages. 24 SECTION 11 AGREEMENTS RELATING TO DEALINGS WITH FNV AND THE FNV STOCK 11.1 Cooperation; Provision of Information. -------------------------------------- The Manager and each Member shall cooperate and coordinate in the drafting and formulation of FNV's or its Affiliates' chapter 11 plan or plans of reorganization. Each Member shall be entitled to, at its option and expense, appear and be heard in the Bankruptcy Court on any matter at issue in the bankruptcy cases. Without limiting the generality of the foregoing, the Company shall take the following actions only if first approved by each Member: (i) file any pleading with, or take any legal and/or factual position or action in the Bankruptcy Court; (ii) approve the terms or form of any pleading, including any plan of reorganization, disclosure statement or related proposed bankruptcy court order; or (iii) subject to Section 5.5, waive a term or condition of any agreement, plan of reorganization or bankruptcy court order. 11.2 Agreements Relating to the FNV Stock. ------------------------------------ Notwithstanding anything to the contrary set forth in this Agreement, the following provisions shall govern the ownership and control of the common stock of FNV acquired by the Company in connection with the FNV plan of reorganization (the "FNV Stock"). --------- (a) Except in the event of liquidation of the Company pursuant to Section 10, or as otherwise unanimously agreed to by the Members, the Company, the Original Berkshire Member, the Original Leucadia Member and the Members shall cause the FNV Stock to be transferred and delivered to, held directly by, and not distributed by, the Company. (b) Without limiting the generality of Section 5.1, the Company shall vote its FNV Stock in such manner as determined by the Manager, and any directors that the Company is entitled to, or has the power to, elect or otherwise nominate or designate to FNV's Board of Directors, shall be elected, nominated or designated by the Manager. 11.3 Purchase of Additional FNV Securities or Interests or ----------------------------------------------------- Participations in Bank Loans. - ----------------------------- If, during the term of this Agreement, a Member, or any Affiliate thereof, desires to acquire additional securities (whether debt or equity) of, or interests or participations in bank loans of, FNV or its Affiliates, then such Member or Affiliate may not proceed with such transaction unless such Member affords the other Members a reasonable opportunity to acquire a proportionate amount (determined in accordance with Stock Percentages) of such securities or interests or participations in bank loans on the same terms and conditions. Notwithstanding the foregoing, L-Sub and its Affiliates and the Manager hereby waive any opportunity to acquire any portion of the 7.5% Senior Secured Notes Maturing 2009 with Contingent Interest due 2016 of FNV that B-Sub or its Affiliates may acquire pursuant to a tender offer in accordance with the plan of reorganization. 11.4 Waiver of Certain Fees and Payments. ------------------------------------ Effective upon receipt by the Company of both the Commitment Fee and either the Funding Fee or the Termination Fee (as such terms are defined in the Commitment), the Original 25 Leucadia Member shall waive any and all rights it may have to receive the $15 million breakup fee and effective upon receipt by the Original Leucadia Member (or any Affiliate) of reimbursement for reasonable out of pocket expenses incurred by the Original Leucadia Member prior to February 1, 2001 and related to FNV and its subsidiaries, the Original Leucadia Member shall waive any and all rights it may have to receive liquidated damages, in each case arising from agreements entered into prior to the Formation Date among the Original Leucadia Member, on the one hand, and FNV, FCC or any of their Affiliates on the other hand. The Members hereby acknowledge and agree that any such breakup fee received by the Original Leucadia Member (or any Affiliate) is income of the Company to be shared evenly between the Members. Consequently, the Original Leucadia Member shall promptly pay over (or cause to be paid over) to the Original Berkshire Member 50 percent of any such breakup fee paid directly to it. SECTION 12 MISCELLANEOUS 12.1 Notices. ------- Any notice, payment, demand, or communication required or permitted to be given by any provision of this Agreement shall be in writing and shall be deemed to have been delivered, given, and received for all purposes (i) if delivered personally to the Person or to an officer of the Person to whom the same is directed, or (ii) when the same is actually received, if sent either by recognized overnight delivery service or registered or certified mail, postage and charges prepaid, or by facsimile, if such facsimile is followed by a hard copy of the facsimile communication sent promptly thereafter by recognized overnight delivery service or registered or certified mail, postage and charges prepaid, addressed as follows, or to such other address as such Person may from time to time specify by notice to the Members and the Company: (a) If to the Company, to the address determined pursuant to Section 1.4 hereof; and (b) If to a Member, to the address set forth on Appendix A hereto. 12.2 Covered Losses. --------------- (a) The Company shall indemnify and hold harmless any Member from any Covered Loss in excess of such Member's Proportionate Share of such Covered Loss. (b) If a Covered Loss is incurred by the Company, or if the Company indemnifies a Member from a Covered Loss pursuant to Section 12.2(a), each of the Members shall contribute to the Company as Required Capital Contributions, upon demand of the Company or any Member, the amount by which such Member's Proportionate Share exceeds the amount of such Covered Loss paid by such Member to date either directly or by Required Capital Contributions made to date pursuant to this Section 12.2(b). The Original Berkshire Member agrees to contribute (or cause to be contributed) to B-Sub, and the Original Leucadia Member agrees to contribute (or cause to be contributed) to L-Sub, an amount sufficient in each case for such Member to fund its Required Capital Contributions as and when required under this Section 12.2(b). 26 (c) In the event a Member or the Company becomes aware of a potential claim, event or state of affairs that could result in a Covered Loss, such Member or the Company shall promptly notify all of the Members thereof, and shall provide all Members with copies of all letters, pleadings or other documents in its possession which could or are alleged to form the material basis of any such claim or action; provided, that the failure to provide such -------- notice in a timely fashion shall not affect the parties' respective obligations hereunder except and only to the extent that any delay in providing such notice results in actual prejudice to another party. In any case, the Members shall cooperate with respect to the defense of any such claim or action to the extent that the Members are not adverse parties or have adverse interests therein. The Members shall jointly control the defense of any such claim or action. 12.3 Defaults by Original Members. ---------------------------- If the Original Berkshire Member or the Original Leucadia Member fails to fulfill its obligations under Section 2.3(c)(iii) or 12.2(b) hereof, then the Member that is not related to such original member shall have a direct claim against such original member for breach of contract hereunder, and the unrelated Member and the Company (at the sole direction of the unrelated Member) shall have all remedies available to either of them in law or equity with respect to such failure by the original member. 12.4 Binding Effect. -------------- Except as otherwise provided in this Agreement, every covenant, term, and provision of this Agreement shall be binding upon and inure to the benefit of the Members and their respective successors, transferees, and assigns. 12.5 Headings. -------- Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or intent of this Agreement or any provision hereof. 12.6 Severability. ------------ Except as otherwise provided in the succeeding sentence, every provision of this Agreement is intended to be severable, and, if any term or provision of this Agreement is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of the remainder of this Agreement. The immediately preceding sentence shall be of no force or effect if the consequence of enforcing the remainder of this Agreement without such illegal or invalid term or provision would be to cause any Member to lose the material benefit of its economic bargain. 12.7 Governing Law. ------------- The laws of the State of Delaware shall govern the validity of this Agreement, the construction of its terms, and the interpretation of the rights and duties arising hereunder. 27 12.8 WAIVER OF JURY TRIAL. -------------------- EACH OF THE MEMBERS, THE ORIGINAL BERKSHIRE MEMBER AND THE ORIGINAL LEUCADIA MEMBER IRREVOCABLY WAIVES TO THE EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT. 12.9 Arbitration. ----------- All claims, disputes and other matters in question arising out of, or relating to this Agreement or the performance thereof, including, without limitation, questions as to whether a matter is governed by this arbitration clause, shall be subject to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "AAA Rules") then ---------- pertaining, insofar as the AAA Rules are not inconsistent with the provisions expressly set forth in this Agreement, unless the parties mutually agree otherwise, and pursuant to the following procedures: (i) the arbitration shall take place in Chicago, Illinois, (ii) a single neutral arbitrator having at least ten (10) years experience in complex commercial arbitration involving financial and partnership or limited liability company issues shall be appointed in the manner specified in the AAA Rules; provided, that if the amount at issue -------- is greater than Twenty-Five Million Dollars ($25,000,000), then a panel of three (3) such neutral arbitrators shall be appointed in the manner specified in the AAA Rules; (iii) each party will, upon the written request of the other party, provide the other with copies of documents relevant to the issues raised by any claim or counterclaim; (iv) each party shall have the right to take the deposition of one individual and any expert witness(es) designated by the other party; (v) other discovery may be ordered by the arbitrator(s) to the extent the arbitrator(s) deem additional discovery appropriate, and any dispute regarding discovery, including disputes as to the need therefor or the relevance or the scope thereof, shall be determined by the arbitrator(s), which determination shall be conclusive; (vi) the arbitrator(s) shall have sixty (60) days following their appointment in which to resolve the question at issue, unless the parties agree in writing to extend such period; (vii) the award rendered by the arbitrator(s) may grant any remedy or relief that the arbitrator(s) deem just and equitable within the scope of this Agreement, including, without limitation, damages, specific performance or injunctive relief, but may not include punitive damages or any remedy or relief that a court having jurisdiction thereof would not have the power to grant; (viii) judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof; (ix) all reasonable out-of-pocket costs and reasonable legal fees incurred by the prevailing party shall be paid by the nonprevailing party, except in the event that a non-arbitrated settlement is reached, in which case each party shall pay its own respective costs and fees incurred thereby; (x) subject to clause (ix), each party shall pay one-half of the costs and fees charged by the arbitrator(s) with regard to the submitted dispute; and (xi) the parties shall be entitled to seek preliminary injunctive relief or other extraordinary remedies in any court having jurisdiction thereof, to preserve the status quo pending the outcome of arbitration. 12.10 Counterpart Execution. --------------------- This Agreement may be executed in any number of counterparts with the same effect as if all of the Members had signed the same document. All counterparts shall be construed together and shall constitute one agreement. 28 12.11 Specific Performance. -------------------- Each Member (as well as, in the case of B-Sub, the Original Berkshire Member, and in the case of L-Sub, the Original Leucadia Member) agrees with the other Members that such other Members would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other remedy to which the non-breaching Members may be entitled, at law or in equity, the non- breaching Members shall be entitled to injunctive relief to prevent breaches of the provisions of this Agreement and specifically to enforce the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction thereof. 12.12 Further Assurances. ------------------ Each Member covenants and agrees on behalf of itself, its successors and its assigns, without further consideration, to prepare, execute, acknowledge, file and deliver such other instruments, documents and statements, and to take such other action as may be required by law or reasonably necessary to effectively carry out the purposes of this Agreement. 12.13 Entire Agreement. ---------------- This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and fully supersedes any and all prior or contemporaneous agreements or understandings between the parties hereto pertaining to the subject matter hereof. 29 IN WITNESS WHEREOF, the parties have executed and entered into this First Amended and Restated Operating Agreement of the Company on August 21, 2001, effective as of the day first above set forth. BHF BERKADIA MEMBER INC. By: /s/ Marc D. Hamburg --------------------------------- Name: Marc D. Hamburg Title: President WMAC INVESTORS, INC. By: /s/ Joseph A. Orlando --------------------------------- Name: Joseph A. Orlando Title: Vice President BERKADIA MANAGEMENT LLC By: /s/ Marc D. Hamburg --------------------------------- Name: Marc D. Hamburg Title: President ACKNOWLEDGED AND AGREED, provided that, except as and to the extent specifically set forth in this Agreement, the signatories below are not undertaking to cause or procure the performance of obligations undertaken herein by the Members. BERKSHIRE HATHAWAY INC. By: /s/ Marc D. Hamburg --------------------------------- Name: Marc D. Hamburg Title: Vice President and Chief Financial Officer LEUCADIA NATIONAL CORPORATION By: /s/ Joseph A. Orlando --------------------------------- Name: Joseph A. Orlando Title: Vice President and Chief Financial Officer APPENDIX A Attached to and Made a Part of the First Amended and Restated Operating Agreement of Berkadia LLC Members ------- Name and Address Debt Percentage Fee Percentage Stock Percentage - ---------------- --------------- -------------- ---------------- BHF Berkadia Member Inc. 36% 20% 20% 1440 Kiewit Plaza Omaha, Nebraska 68131 Attn: Marc Hamburg Facsimile: (402) 346-3375 WMAC Investors, Inc. 4% 20% 20% 315 Park Avenue South New York, New York 10010 Attn: Joseph Steinberg Facsimile: (212) 598-4869 Berkadia Management LLC 60% 60% 60% 1440 Kiewit Plaza Omaha, Nebraska 68131 Attn: Marc Hamburg Facsimile: (402) 346-3375 APPENDIX B Attached to and Made a Part of the First Amended and Restated Operating Agreement of Berkadia LLC Additional Allocations ---------------------- 1. Special Allocations. ------------------- The following special allocations shall be made in the following order: (a) Minimum Gain Chargeback. Except as otherwise provided in Section ----------------------- 1.704-2(f) of the Regulations, notwithstanding any other provision of Section 3 of the Agreement and this Appendix B, if there is a net decrease in Company Minimum Gain during any Allocation Year, each Member shall be specially allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Member's share of the net decrease in Company Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This Paragraph 1(a) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(f) of the Regulations and shall be interpreted consistently therewith. (b) Member Minimum Gain Chargeback. Except as otherwise provided in ------------------------------ Section 1.704-2(i) (4) of the Regulations, notwithstanding any other provision of Section 3 of the Agreement and this Appendix B, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to Member Nonrecourse Debt during any Allocation Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of Company income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such Member's share of the net decrease in Member Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This Paragraph 1(b) is intended to comply with the minimum gain chargeback requirement in Section 1.704-2(i)(4) of the Regulations and shall be interpreted consistently therewith. (c) Qualified Income Offset. In the event any Member unexpectedly ----------------------- receives any adjustments, allocations, or distributions described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6) of - - - - - - the Regulations, items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of the Member as quickly as possible; provided that an allocation pursuant to this Paragraph -------- 1(c) shall be made only if and to the extent that the Member would have an Adjusted Capital Account Deficit after all other allocations provided for in Section 3 of the Agreement and this Appendix B have been tentatively made as if this Paragraph 1(c) were not part of this Appendix B. (d) Gross Income Allocation. In the event any Member has a deficit ----------------------- Capital Account at the end of any Allocation Year which is in excess of the sum of the amount such Member is obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible; provided that an allocation -------- pursuant to this Paragraph 1(d) shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in Section 3 of the Agreement and this Appendix B have been made as if Paragraph 1(c) hereof and this Paragraph 1(d) were not part of this Appendix B. (e) Nonrecourse Deductions. Nonrecourse Deductions for any Allocation Year ---------------------- shall be specially allocated to the Members in proportion to their respective Debt Percentages. (f) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for ----------------------------- any Allocation Year shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i)(1). (g) Section 754 Adjustments. To the extent an adjustment to the adjusted ----------------------- tax basis of any Company asset, pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or - - 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital - - Accounts as the result of a distribution to a Member in complete liquidation of such Member's interest in the Company, the amount of such adjustment to Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in accordance with their interests in the Company in the event Regulations Section 1.704- 1(b)(2)(iv)(m)(2) applies, or to the Member to whom such distribution was made - - in the event Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies. - - 2. Curative Allocations. -------------------- The allocations set forth in Paragraphs 1(a) through (g) and Paragraph 3 hereof (the "Regulatory Allocations") are intended to comply with certain ---------------------- requirements of the Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Paragraph 2. Therefore, notwithstanding any other provision of Section 3 of the Agreement and this Appendix B (other than the Regulatory Allocations), the Company shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Member's Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Section 3 of the Agreement. Appendix B-2 3. Loss Limitation. --------------- Losses allocated pursuant to Section 3 of the Agreement shall not exceed the maximum amount of Losses that can be allocated without causing any Member to have an Adjusted Capital Account Deficit at the end of any Allocation Year. In the event some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of an allocation of Losses pursuant to Section 3 of the Agreement, the limitation set forth in this Paragraph 3 shall be applied on a Member by Member basis and Losses not allocable to any Member as a result of such limitation shall be allocated to the other Members in accordance with the positive balances in such Member's Capital Accounts so as to allocate the maximum permissible Losses to each Member under Section 1.704-1(b)(2)(ii)(d) of - the Regulations. 4. Other Allocation Rules. ---------------------- (a) For purposes of determining the Profits, Losses, or any other items allocable to any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Members using any permissible method under Code Section 706 and the Regulations thereunder. (b) The Members are aware of the income tax consequences of the allocations made by Section 3 of the Agreement and this Appendix B and hereby agree to be bound by such provisions in reporting their shares of Company income and loss for income tax purposes. (c) Solely for purposes of determining a Member's proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Regulations Section 1.752-3(a) (3), the Members' interests in Company profits are in proportion to their Debt Percentages. (d) To the extent permitted by Section 1.704-2(h)(3) of the Regulations, the Company shall endeavor to treat any distributions as having been made from the proceeds of a Nonrecourse Liability or a Member Nonrecourse Debt only to the extent that such distributions would cause or increase an Adjusted Capital Account Deficit for any Member. 5. Tax Allocations; Code Section 704(c). ------------------------------------ (a) In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its initial Gross Asset Value (computed in accordance with the definition of Gross Asset Value). (b) In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value, subsequent allocations of income, gain, loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Regulations thereunder. Appendix B-3 (c) Any elections or other decisions relating to such allocations shall be made by the Manager in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Paragraph 5 are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member's Capital Account or share of Profits, Losses, other items, or distributions pursuant to any provision of this Agreement. (d) Any original issue discount recognized by the Company for federal income tax purposes shall be allocated in its entirety to Berkadia-Management. (e) Subject to the foregoing, for federal income tax purposes each item of income, gain, loss or deduction that corresponds to an item of income, gain, loss or expense taken into account in calculating Profits or Losses or specially allocated under Section 3.1(a) of the Agreement or Section 1, 2 or 3 of this Appendix B (a "Book Item") shall be allocated among the Members in the same proportion as the corresponding Book Item is allocated among the Members. Appendix B-4 EX-12 9 dex12.txt LETTER AGREEMENT BETWEEN BERKSHIRE AND THE COMPANY Exhibit 12 Berkshire Hathaway Inc. 1440 Kiewit Plaza Omaha, Nebraska 68131 June 13, 2001 The FINOVA Group Inc. FINOVA Capital Corporation 4800 North Scottsdale Road Scottsdale, Arizona 85251 Ladies and Gentlemen: Reference is made to the letter agreement dated June 10, 2001 (the "Letter Agreement") by and among Berkadia LLC, Berkshire Hathaway Inc ("Berkshire"), Leucadia National Corporation, The FINOVA Group Inc., and FINOVA Capital Corporation. Berkshire (which as used hereinafter means Berkshire Hathaway Inc. and its direct and indirect subsidiaries) hereby agrees not to transfer the New Senior Notes received by Berkshire pursuant to the Plan (as defined in the Letter Agreement) and purchased pursuant to the Tender Offer (as defined below) for a period of four (4) years from the Effective Date of the Plan. If Berkshire acquires New Senior Notes in addition to those received by it on the Effective Date of the Plan and purchased by it pursuant to the Tender Offer, Berkshire may transfer any New Senior Notes it owns so long as at all times during the four (4) years from the Effective Date it owns not less than the aggregate principal amount of New Senior Notes that it received on the Effective Date pursuant to the Plan and purchased pursuant to the Tender Offer. Nothing herein restricts Berkshire Hathaway Inc. from transferring ownership of New Senior Notes to any of its direct or indirect subsidiaries or restricts any such subsidiary from transferring ownership of New Senior Notes to Berkshire Hathaway Inc. or any other such subsidiary. As used in this paragraph, "transfer" means any sale, transfer or other disposition of New Senior Notes, any short sale of New Senior Notes, and any hedge or derivative transaction that would result in Berkshire ceasing to have the economic risk of the holder of such New Senior Notes. In addition, if the Berkadia Loan is funded and the New Senior Notes are issued as contemplated by the Plan, then as soon as reasonably practicable thereafter, Berkshire will commence a tender offer for up to $500 million in aggregate principal amount of New Senior Notes, at a cash purchase price of 70% of par ($700 per $1,000 principal amount) (the "Tender Offer"). The Tender Offer will be made in compliance with all applicable securities laws and will remain open for the longer of 20 business days or 30 days. Berkshire will purchase any and all New Senior Notes validly tendered, up to the $500 million aggregate principal amount limit, and will prorate among tendering holders of the New Senior Notes if the Tender Offer is oversubscribed. Definitive offering documents to be prepared and distributed at that time will set forth the detailed terms of the Tender Offer, consistent with the above. Berkshire's obligations to commence and to consummate the Tender Offer will be subject to the conditions to be specified in those documents, which will be customary, but which will not include a financing condition. Berkshire's agreements herein are conditioned upon the same conditions, and will terminate upon the same events, as those conditions and events set forth in the Letter Agreement, as fully as if such conditions were set forth herein. Capitalized terms used herein without definition have the meanings given them in the Amended and Restated Disclosure Statement with respect to the Joint Plan of Reorganization of Debtors under Chapter 11 of the United States Bankruptcy Code filed with the United States Bankruptcy Court for the District of Delaware on June 1, 2001. This letter amends and restates the letter agreement among the parties hereto dated June 10, 2001. Very truly yours, BERKSHIRE HATHAWAY INC. By: /s/ Marc D. Hamburg ------------------- Marc D. Hamburg Vice President Accepted and Agreed to as of June 13, 2001 FINOVA Capital Corporation By: /s/ William J. Hallinan ----------------------- Name: William J. Hallinan Title: Pres. & CEO THE FINOVA GROUP INC. By: /s/ William J. Hallinan ----------------------- Name: William J. Hallinan Title: Pres. & CEO EX-13 10 dex13.txt AGREEMENT TO FILE THE SCHEDULE 13D JOINTLY Exhibit (13) of Schedule 13D Required by Item 7 of Schedule 13D AGREEMENT The undersigned persons hereby agree that reports on Schedule 13D, and any amendments thereto, may be filed in a single statement on behalf of all such persons, and further, each such person designates Marc D. Hamburg as its agent and attorney-in-fact for the purpose of executing any and all such reports required to be made by it with the Securities and Exchange Commission. Dated: August 28, 2001 BERKADIA LLC By: /s/ Marc D. Hamburg ------------------------------ Name: Marc D. Hamburg Title: President BERKADIA MANAGEMENT LLC By: /s/ Marc D. Hamburg ------------------------------ Name: Marc D. Hamburg Title: President BHF BERKADIA MEMBER, INC. By: /s/ Marc D. Hamburg ------------------------------ Name: Marc D. Hamburg Title: President BH FINANCE LLC By: /s/ Marc D. Hamburg ------------------------------ Name: Marc D. Hamburg Title: President COLUMBIA INSURANCE COMPANY By: /s/ Marc D. Hamburg ------------------------------ Name: Marc D. Hamburg Title: Treasurer BH COLUMBIA INC. By: /s/ Marc D. Hamburg ------------------------------ Name: Marc D. Hamburg Title: President OBH, Inc. By: /s/ Marc D. Hamburg ------------------------------ Name: Marc D. Hamburg Title: Vice President BERKSHIRE HATHAWAY INC. By: /s/ Marc D. Hamburg ------------------------------ Name: Marc D. Hamburg Title: Vice President and Chief Financial Officer WARREN E. BUFFETT /s/ Warren E. Buffett ------------------------------ -----END PRIVACY-ENHANCED MESSAGE-----